Author: admin_gst

2019 (2) TMI 479 – CESTAT HYDERABAD – TMI – SEZ unit – Refund of service tax – N/N. 12/2013-ST – rejection on the ground that the claim was filed beyond the period of one year stipulated in the notification – Held that:- The bulk of the demand pertains to rejection of invoices meant for waste disposal services availed by the appellant on the ground that these were not approved by the Development Commissioner. No show cause notice was issued to the appellant on this ground. The show cause notice which was issued was only covering another part of the refund claim – the principles of natural justice have been violated and therefore the matter needs to be remitted to the original authority with direction to issue a show cause notice – appeal allowed by way of remand. – Appeal No. ST/30754/2018 – A/31605/2018 – Dated:- 17-12-2018 – Mr. P. Venkata Subba Rao, Member (Technical) Ms. Swetha, Advocate for the Appellant. Shri Arun Kumar, Dy. Commissioner/AR for the Respondent. ORDER Per: P.V. Su

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ces were not approved by the Development commissioner. The services in question pertain to waste disposal carried out by their service provider M/s Ramky Enviro Engineers Ltd. Aggrieved, the appellant preferred an appeal before the first appellate authority who upheld the Order-in-Original and rejected the appeal. Hence, this appeal. 3. Learned counsel for the appellant submits that there was small delay in filing the refund claim with respect to the invoices amounting to ₹ 3,91,649/- as they had to obtain necessary certificates from the bankers. She draws the attention of the Bench to the Notification No. 12/2013-ST dated 01.07.2013 Para 3 (iii) (e) of which stipulates the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made or such extended period as the Asst. Commissioner of Central Excise or Dy. Commissioner of Central Excise, as the case may be, shall permit. It is her assertion that the small delay in fili

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

given to them. She relies on the cases of Toyo Engineering India Ltd [2006 (201) ELT 513 (SC)], Brindavan Beverages Pvt Ltd [2007 (213) ELT 487 (SC)] and Caprihans India Ltd [2015 (325) ELT 632 (SC)] and asserts that the impugned order as well as the order of the lower authority have clearly travelled beyond the scope of the show cause notice which is not sustainable. 4. Learned departmental representative concedes that the show cause notice did not cover rejection of refund claim of ₹ 20,80,749/- on waste disposal services and to this extent travelled beyond the scope of show cause notice. On the question of rejection of refund of ₹ 3,91,649/-, he draws the attention of the bench to the Order-in-Original in which the Asst. Commissioner had recorded that he had not found sufficient reason to not condone the delay. 5. I have considered the arguments on both sides and perused the records. The bulk of the demand pertains to rejection of invoices meant for waste disposal servi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – States – Order No. 01/2018-State Tax – Dated:- 17-12-2018 – GOVERNMENT OF GOA Department of Finance Revenue & Control Division Order 38/1/2017-Fin(R&C)/1973 01/2018-State Tax Whereas, sub-section (1) of section 44 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) (hereafter in this Order referred to as the said Act) provides that every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year; And wher

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – States – FTX.56/2017/Pt-I/160 – Dated:- 17-12-2018 – GOVERNMENT OF ASSAM ORDERS BY THE GOVERNOR FINANCE (TAXATION) DEPARTMENT NOTIFICATION The 17th December, 2018 No. FTX.56/2017/Pt-I/160.- In exercise of the powers conferred by section 148 the Assam Goods and Services Tax Act, 2017 (Assam Act No. XXVIII of 2017) (hereafter in this notification referred to as the "said Act"), read with section 45 of the said Act and rule 81 of the Assam Goods and Services Tax Rules, 2017 (herein

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Started By: – Ravikumar Doddi – Dated:- 15-12-2018 Last Replied Date:- 15-12-2018 – Dear sir, Kindly clarify that interest on late filing of returns is it on gross payable or net payable ( after deducting ITC), Section 50 says liable to pay tax. Any how if there is no ITC it is gross,when it is ITC failed to file before prescribed date shall we calculate on gross or net. Rate of interest how should we calculate is it for whole month or for short fall dates. – Reply By S

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Valuation – inclusion of amortized value of the tool received on FOC basis from the customer in assessable value – CBEC circular No. 47/21/2018 – The amortized value of the to

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Supply of service or not – direct transfer of BP business to MSPL and PM business to MPMPL – slump sale – related parties or not – input tax credit – notional consideration (p

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – States – Order No. 1/2018-State Tax – Dated:- 15-12-2018 – GOVERNMENT OF ODISHA FINANCE DEPARTMENT Order The 15th December, 2018 ODISHA GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2018. Order No. 1/2018-State Tax Whereas, sub-section (1) of section 44 of the Odisha Goods and Services Tax Act, 2017 (Odisha Act 7 of 2017) (hereafter in this Order referred to as the said Act) provides that every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

n exercise of the powers conferred by section 172 of the Odisha Goods and Services Tax Act, 2017, the State Government, on recommendations of the Goods and Services Tax Council, do hereby make the following Order, to remove the difficulties, namely:- 1. Short title – This Order may be called the Odisha Goods and Services Tax (Removal of Difficulties) Order, 2018. 2. In section 44 of the Odisha Goods and Services Tax Act, 2017, after sub-section (2), the following Explanation shall be inserted, namely:- "Explanation.- For the purposes of this section, it is hereby declared that the annual return for the period from the 1st July. 2017 to the 31st March. 2018 shall be furnished on or before the 31st March,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2019 (3) TMI 537 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI – Levy of GST – Supply of goods/services made by brand owner or not – Liquor licence – Contracting Bottling Units (CBU) scope of supply – Applicant permits the CBU to affix the labels etc. on the finished products and packaging. – CBU provides manufacturing services to the Applicant, and is remunerated in the form of bottling charges – whether the aforementioned surplus/ profit earned by the Applicant as the Brand Owner is liable to GST – maintainability of advance ruling aplication – Held that:- As per Section 95 (a) of the CGST Act. 2017 “advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant – the supply of services or goods or both, if any is not und

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ain agreed upon reimbursements, such as taxes and expenses). The CBUs after manufacturing the IMFL, deliver the said goods to buyers as per the applicant's directions and the sale price for the said goods is received by the Applicant. All the raw materials, packing materials, finished goods, scrap, etc. used by the CBUs are paid for, by the Applicant – From a perusal of the sample agreements submitted by the applicant, we find that the said agreements are on a principal-to-principal basis, the price at which raw materials are to be procured is fixed by the applicant, the risk, property and interest in the manufactured product passes from the CBU to the applicant upon delivery of the product to the carrier noaminated by the applicant, the selling price is as per the directions of the applicant, the sale price of the goods is received by the applicant, the applicant pays consideration to the CBU in the nature of bottling charges which are fixed on a per month case basis, and not the sale

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

le supply to the Contract Bottling Unit” is answered in the negative. – GST-ARA-67/2018-19/B-155 Dated:- 15-12-2018 – SHRI B.V. BORHADE, AND SHRI B. TIMOTHY, (MEMBER) PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by ALLIED BLENDERS AND DISTILLERS PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following issue. Whether in the facts and circumstances of the present case, the Contract Bottling Unit is making a taxable supply to the Applicant (i.e. Brand Owner), or, alternatively, whether the Applicant (i.e. brand owner) is making a taxable supply to the Contract Bottling Unit? Correspondingly, whether in the facts and circumstances of the present case, the Applicant

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of the present ruling sought: 1. Allied Blenders and Distillers Pvt. Ltd. ( ABD / Applicant ) has its GST registered premises at 394/C, Lamington Chambers, Lamington Road, Mumbai – 400 004. The Applicants are duly registered with the GST department, holding Registration No. 27AAACY3846K1ZX. 2. The Applicant, also known in the industry as a Brand Owner ( BO ), is the holder of various registered brands in relation to Indian Made Foreign Liquor ( IMFL ). As the owner of the said IMFL brands, no one other than the Applicant has the ability to exploit the brands, including by way of sale of IMFL under those brands. At the same time, the State Excise laws mandate that the manufacture and sale of IMFL, as well as the procurement of Extra Neutral Alcohol ( ENA ) required for the manufacture of IMFL, can only be undertaken by parties, who have been duly licensed by the State Excise authorities. 3. In order to the meet the requirements under the State Excise laws, the Applicant approaches vario

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

he aforesaid contractual arrangements with the CBUs on a strictly non-exclusive basis. In fact, in order to fully exploit its brand, the Applicant simultaneously enters into multiple such arrangements with various CBUs. The Applicant is also at liberty to terminate the arrangement with any CBU. Upon such termination, all the raw materials, packing materials, finished goods, scrap, etc. which are financed by the Applicant are to be handed over to the Applicant, and the CBU is obligated to immediately cease and desist from using the brands of the Applicant associated with the IMFL products which were being manufactured. 5. The terms and conditions of all such arrangements between the Applicant (as the Brand Owner) and the CBU are the same, and for the purposes of this Application, the Applicant draws reference to sample Agreements for Tie-Up Manufacture of IMFL ( Manufacturing Agreement ) with various CBUs (S.P.Y. Agro Industries Ltd., Unistil Alcoblends Pvt. Ltd., Devicolam Distilleries

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

erials pertaining to the manufacturing operations are to be handed over by the CBU to the BO. The packing materials (bottles, labels, caps, seals, outer cartons, etc.) are to be procured from sources identified by the BO. The risk, property and interest in the manufactured product passes from the CBU to the BO upon delivery of the product to the carrier nominated by the BO. The price at which the CBU is to sell and deliver the manufactured products is as per the directions of the BO (sample rate approvals are attached herewith as Exhibit-C). The entities to whom sales of the manufactured products are to be made are also identified by the B O. The BO has the discretion to directly make payments for the raw materials, packing materials, transportation and payment of various taxes/ fees. The sale price of the goods is received by the BO. The consideration payable to the CBU is in the nature of bottling charges which are fixed on a per month case basis, and not the sale price of the manufa

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s, finished goods, etc.) in respect of such materials which are either directly paid for by the BO or covered by the working capital financed by the BO (sample copies of signs affixed at the premises of the CBU affirming the hypothecation/ lien in favour of the Applicant are attached herewith as Exhibit-E). The CBU does not have any lien nor can it create any charge on any of the raw materials, packing materials or products of the BO. If so required by the BO, the CBU is obligated to issue a no lien certificate which is to be endorsed to the bankers of the BO (sample copies of the said certificate are attached herewith as Exhibit-F). Insurance in respect of the manufactured goods are obtained by the Applicant in its own name (sample copies of insurance policy are attached herewith as Exhibit-G); Any claims arising from the aforesaid insurance on the manufactured goods are also received by the Applicant, and not by the CBUS (sample copy of a claim payment is attached herewith as Exhibit

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

L manufactured is attached herewith as Exhibit-K). 6. As stated hereinabove, under the arrangement between the Applicant and the CBUS, in terms of the clause on Consideration, the CBU is remunerated in the form of bottling charges per case of IMFL manufactured. In this regard, sample invoices/ debit notes raised by the CBUs on the Applicant for the manufacturing and bottling charges are attached herewith as Exhibit L. 7. In terms of the flow of funds, the sale price of the IMFL is received directly by the Applicant from the State Corporation or other buyer (in a few cases, they money is received by the CBUs but is immediately auto-transferred to the Applicant vide standing instructions or otherwise). The Applicant then makes payment of the bottling charges and agreed upon reimbursements (such as for taxes) to the CBUs. The Applicant also makes payment directly to the raw material suppliers. The amount left with the Applicant (i.e. Brand Owner) after making all of the aforesaid payments

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. 7. Scope of supply (1) For the purposes of this Act, the expression supply includes (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business 2. Definitions In this Act, unless the context otherwise requires, – (52) goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply (102) services means anything other than goods, money and securities

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e position under GST, as the supply of alcoholic liquor for human consumption has been constitutionally excluded from the purview of the GST. 4. However, an issue arose under the Service Tax provisions as to whether the CBUs were providing a service to the BOs, or vice versa, so as to attract the levy of Service Tax. In this regard, the Central Board of Indirect Taxes and Customs ( CBIC / Board ) had clarified vide two Circulars that under such contract manufacturing arrangements, the CBU is providing manufacturing services to the BO, but no services are being provided by the BO to the CBU. The relevant extracts of the said Circulars are extracted below for ease of reference: Circular No. 249/1/2006-C.X.4 dated 27.10.2008 Under such arrangement the BO gets alcoholic beverages manufactured by the licencee/ manufacturer, the latter holding the required State Licences for manufacture of the alcoholic beverages. In trade, such licencees /manufacturers are called the Contract Bottling Units

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

n the nature of business profit (which falls within the purview of direct taxes), will not be chargeable to service tax. Copies of the aforesaid Circulars are attached herewith as Exhibit-N. 5. Further, pursuant to a Letter addressed by the Applicant to the jurisdictional Service Tax Department, it was affirmed vide Letter F.No. ST/HQ/PREVIA. 198(2)/2006/5734 dated 14.12.2009 that the surplus/ profit of the BO is not liable to Service Tax, per the previously issued Circulars. A copy of the said letter is attached herewith as Exhibit-O. 6. In terms of judicial decisions, in the Applicant's own case, as well as in the case of various other BOs in the industry operating under similar arrangements (as listed below), the Hon'ble CESTAT has held that the CBU is providing services to the BO which are taxable and/or that no service is rendered by the BO to the CBU. BDA Pvt. Ltd. vs. CCE, Meerut [2015 (40) STR 352 (Tri-Del)] = 2015 (6) TMI 586 – CESTAT NEW DELHI affirmed in Commissioner

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

57 – SUPREME COURT. At the outset, in the present context, it is to be appreciated that the aforesaid contractual arrangement between the Applicant and the CBUs has evolved as a result of the intersection of; (i) the commercial requirements of the Applicant (i.e. to exploit the brands under its ownership through the manufacture and sale IMFL under those brands); and (ii) the licensing requirements under the State Excise laws (viz. that only a licence holder can source the ENA for such manufacture, carry out the manufacture of the IMFL, and sell the alcoholic beverages). It is for the latter reason that the procurement of the raw materials, manufacture and sale of the IMFL are carried out by the CBUs who holds the necessary licences. However, the entirety of the supervision and control of various aspects (including the designation of the sources of raw materials, payment the said raw materials, every stage of the process of manufacture, determination price for sale of IMFL and identifi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

termines the remuneration (in terms of the bottling charge on a per case basis) which it is willing to pay to the CBU. It is also significant that the Applicant enters into the aforesaid contractual arrangements with the CBUs on a strictly non-exclusive basis. In fact, in order to fully exploit its brand, the Applicant simultaneously enters into multiple such arrangements with various CBUs. The Applicant is also at liberty to terminate the arrangement with any CBU. Upon such termination, all the raw materials, packing materials, finished goods, scrap, etc. which are financed by the Applicant are to be handed over to the Applicant, and the CBU is obligated to immediately cease and desist from using the brands of the Applicant associated with the IMFL products which were being manufactured. 9. Accordingly, the true commercial nature of the arrangement is one in which the CBU provides manufacturing services to the Applicant, and is remunerated in the form of bottling charges. BOs such as

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

terials, packing materials, etc. can either directly be procured by the BO or can only be procured from sources identified by the BO; A hypothecation or lien in favour of the BO is to be created in relation to market receivables and the goods (raw materials, packing materials, finished goods, etc.); Qua scrap, it can only be sold at the rates pre-approved by the BO and any amount realized is to be credited to the BO; On a termination of the agreement, all finished goods, raw materials, packing materials, etc. financed or paid for by the BO are to be handed over to the BO without receiving any charge or consideration for such handover; Most significantly, instead of being paid the sale price (as would have been expected if the goods were owned by the CBU), there is a payment of a bottling charge which in its true nature is a payment towards the bottling services rendered by the CBU; All aspects of the transaction, extending from sourcing to manufacture to distribution are carried out un

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ng the CBUs to affix the Applicant's brand on the products is evidently merely to enable the manufacture of the IMFL per the commercial requirements of the Applicant, which cannot in any manner be treated as a supply of service by the Applicant to the CBUs. Any such position would result in the absurdity that in every transaction of job work or contracting manufacturing, there would be a supply of service by the party placing an order for the manufacture/ processing of goods, to the party manufacturing processing those goods. 12. Moreover, in terms of Section 7 of the CGST Act, the requirements of a supply liable to GST are: (i) goods or services or both; (ii) made for a consideration; (iii) by a person; (iv) in the course or furtherance of business. Even if the provision of the specifications by the Applicant and permitting the CBUs to affix the Applicant's brand on the products can be seen as a supply of service by a person (i.e. the Applicant), in the course of furtherance o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

f the past Circulars and rulings under the erstwhile Service Tax regime, which are referred to hereinabove at paragraphs 6 to 8. It is submitted that there has been no change in the contractual arrangements analysed in the said Circulars and rulings under the erstwhile regime, and the conclusion reached by the Board and the Courts/Tribunals on the true commercial nature of the said arrangements (viz. that the CBU is rendering a service to the BO, and not vice versa) continues to hold good under the GST. Furthermore, it is also submitted that there has been no material change in the provisions between the erstwhile Service Tax regime and the current GST regime which would necessitate a change in the position on issue. In fact, manufacturing services carried out for or on account of another party (whether on the inputs of another or otherwise) continue to be taxable under Heading 9988, and in any event, services nowhere elsewhere classified are also covered under Heading 9997. Additional

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s (either to a State Corporation or to a private buyer) under the instructions of the Applicant, and at the price fixed by the Applicant. The sale price of the alcoholic beverages is received by the Applicant, out of which the Bottling Fee and other reimbursements are paid to the CBU. The balance amount is retained by the Applicant as its surplus/ profit. ISSUE INVOLVED: 5. In the above background, the issue referred to this Hon'ble AAR is whether the aforementioned surplus/ profit earned by the Applicant as the Brand Owner is liable to GST. LEGAL SUBMISSIONS: 6. The Applicant submits that there is no supply of service by the Applicant to the CBUs for the following reasons. • The true commercial nature of the transaction can be determined by an examination of critical factors, such as who engages whom, who pays whom and who can terminate the agreement. In terms of these factors, it requires to be seen who the service recipient is, and who the service provider is. Accordingly,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

er the first type of arrangement, the Brand Owner was liable to pay Service Tax on the brand licensing fees. However, under the second type of arrangement (which is the type of arrangement entered into by the present Applicant), it is the CBU who was liable to pay Service Tax on the Bottling Fee. (Refer Pg. 350 of the Compilation Vol. 2, Para 1 and Para 2] • A further clarification in the form of Circular F. No. 332/17/2009-TRU dated 30.10.2009 was subsequently issued, which again clarified that Service Tax was payable on the Bottling Fee earned by the CBU, but not on the surplus/ profit retained by the Brand Owner. (Refer Pg. 352 of the Compilation Vol. 2, Para 2(7) and Para 4(d)/ • In the present case, the Applicant as the Brand Owner approaches the CBU to seek out bottling services, and not vice versa. In some cases, the Applicant terminates the CBU and appoints a new CBU. In this regard, sample copies of such Termination letters issued by the Applicant to certain CBUs wer

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ntation) which indicate that the nature of the arrangement is one in which the CBU provides services of bottling to the Applicant. (Refer Para 5 of Annexure B to the AAR Application) The fact that the manufacture is clearly being carried out by the CBU for the Applicant is also clear from the fact that the product labels bear the brands of the Applicant as well as state that the said brands are registered to the Applicant. Separately, the labels state that the products are manufactured by the CBU in question. In this regard, sample copies of product labels were handed over in the course of the hearing on 28.11.2018, and are also enclosed as Annexure-B. The aforesaid agreements in the Applicant's case, therefore, clearly fall under the second type of arrangement, wherein the CBU is providing services to the Applicant, and not vice versa. Accordingly, the CBUs of the Applicant have always charged and paid Service Tax on the Bottling Fees. Currently, the CBUs of the Applicant have bee

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Aurangabad [2014 (35) S T R 570 (Tri-Mum)] = 2014 (4) TMI 1040 – CESTAT MUMBAI [Refer 364 and 367 of the Compilation Vol. 2). Furthermore, the said Tribunal ruling in the Applicant's own case was also upheld by the Hon'ble Supreme Court in Commissioner vs. BDA Pvt. Ltd. [2016 (42) S.T.R. [J143 (S.C.) = 2015 (11) TMI 1585 – SUPREME COURT [Refer Pg. 363 of the Compilation Vol. 2). No material change has occurred under the GST, which warrants a change from the aforesaid taxing position under the erstwhile Service Tax provisions. Under Section 7 of the CGST Act, 2017, the taxable event continues to be a supply of service by a person, for a consideration, in the course of furtherance of business. In response to a specific query from the Hon'ble AAR, it was also submitted that the brand value is reflected in the sale price of the alcoholic beverages, which suffers a levy of State Excise duty and VAT, as the Legislature has chosen not to include alcoholic beverages under GST. Furt

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

r case plus reimbursed expenses. Accordingly, a consideration was being paid to the Brand Owner for the grant of a representational right in relation to the brand. Consequently, the amounts received by the Brand Owner were not in the nature of profit [Refer Para 35, 43 of the Karnataka AAAR ruling). It was also highlighted that the ruling nowhere states that both the Brand Owner and CBU could simultaneously be suppliers of service. Either the Brand Owner can be a supplier of service, or the CBU can be a supplier of service. In that case, it was held by the AAAR, and also accepted by the Brand Owner, that there was no service being provided by the CBU, and no GST was being paid thereon (Refer Para 28 of the Karnataka AAAR ruling). The present case is the exact opposite, as the CBU is rendering bottling services to the Applicant, and GST has been duly discharged on the consideration for the services supplied, viz. the Bottling Fee. PRAYER: In view of the foregoing, the Applicant prays th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

under the State Excise laws, there are various Contracting Bottling Units ( CBUs ) who hold the requisite licences under the State Excise laws to source the ENA and carry out the manufacture and bottling of the IMFL'. 3. M/s Allied Blenders and Distillers Pvt. Ltd., approaches the CBUs and enter into contractual arrangements under which the CBUs undertake the manufacture of the IMFL for the BOs, in return for the payment of bottling charges (and certain agreed upon reimbursements, such as taxes and expenses). To enable the manufacturing of IMFL under the BO's brands, the BO as part of the arrangement permits the CBU to affix the brand labels etc. on the finished products and packaging. 4. In terms of the sale of the IMFL, in certain States, the sale of alcoholic beverages can only take place through a State-owned corporation; accordingly, the CBUs deliver the goods to the relevant State Corporation or other buyer as per the directions of the BO. 5. As regards the flow of funds,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

UNDER GST: 7. In the aforesaid transactions, it is the CBU who provides services to the M/s Allied Blenders and Distillers Pvt. Ltd. (the BO) in return for the bottling charges (and other reimbursements). It is not the case that the BO is providing brand-related services to the CBU, for the CBU to manufacture and sell the IMFL on its own account. This conclusion is borne out by the following factors:- (i) At the outset, it is the BO who approaches the CBU to manufacture the IMFL for it. (ii) The IMFL brands belong to the BO and the BO seeks to commercially exploit the same by manufacturing and selling alcoholic beverages under the various brand names. However, the BO does not have the requisite State Excise licences in the various States, and therefore made contracts with the CBUs who will carry out the procurement, manufacture the IMFL and sell the same under the State Excise licences held by them. (iii) The BO accordingly enters into non-exclusive arrangements with various such CBUs

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

td. (v) The total working capital as required by the CBU for its corresponding manufacturing operations is to be arranged by the BO. (vi) In terms of procurement, the BO has right to either directly arrange, or, recommend suppliers for the procurement of all raw materials and packing materials, and the BO always approves the price at which materials are to be procured by the CBU. The CBU has no discretion on the procurements. The BO may also directly make payment for the raw materials, packing materials etc. to the vendors. (vii) The entire manufacturing activity by the CBU is carried out under the supervision of the BO, and, for this purpose, the BO deputes fixed personnel to the premises of the CBU. During the manufacturing, any unusable or damaged materials are to be handed over by the CBU to the BO. In respect of any wastage which occurs, the disposal of such wastage is to be done only at the rates approved by the BO and all such amounts are to be paid to the BO. On termination of

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Pvt. Ltd. (the BO) incurs various expenses, including the bottling charges paid to the CBUs. 1 Ire balance amounts retained by them represent their earnings / profit from the entrepreneurial venture. These earnings duly suffer Income Tax but cannot be brought to tax under GST, as there is no supply being made by the M/s Allied Blenders and Distillers Pvt. Ltd. (the BO) to the CBUs. 10. This poisition was also affirmed under the previous Service lax regime, vide Circular No. 249/1/2006-CX4-dated 27.10.2008 and Circular F. No. 332/17/2009-TRU dated 30.10.2009 issued by the Ministry of Finance. The latter Circular specifically confirmed that Service tax would be payable on the bottling/job charges, distribution costs and other reimbursable… the surplus /profit earned by the BO being in the nature business profit (which falls within the purview of direct taxes), will not be chargeable to service tax . 11. The Notification No. 39/2009-Service Tax dated 23.09.2009 under the previous Servi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

roduction, inventor) dispatches of goods as well as financial transactions relating thereto. 12. There has been no material change in the provisions between the erstwhile Service Tax regime and the current GST regime, and the above position should continue to apply. 04. HEARING The case was scheduled for 11.09.2018 for Preliminary hearing when Sh. Rohan Shah, Advocate along with Ms. Divya Jeswant, Advocate and Sh. Kalan Jain Tax Adviser and Sh. Atit Dalal, head taxation appeared and made contentions tor admission of application as per contentions in their ARA application. Jurisdictional Officer Sh. Ashok S. Gupta Supt., Division I, Mumbai Central appeared and stated that they would be making submissions in due course. The application was admitted and called for final hearing on 28.11.2018, Sh. Rohan Shah, Advocate along with Ms. Divya Jeswant, Advocate and Sh. Atit Dalai, head taxation appeared argued case on merit. Jurisdictional Officer Sh. Sashiknnt Bhasgauri Supt., appeared and mad

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

g a taxable supply to the Applicant? 2. Whether in the facts and circumstances of the' present case, the Applicant (i.e. brand owner) is making a taxable supply to the Contract Bottling Unit? 3. Whether in the facts and circumstances of the present case, the Applicant (i.e. Brand Owner) is paying consideration to the Contract Bottling Unit by way of bottling charges? 4. Whether the Contract Bottling Unit is paying consideration to the Applicant by way of brand owner surplus? We find from the above that questions numbers 1 and 4 are asked by the applicant but pertains to the CBU. As per Section 95 (a) of the CGST Act. 2017 advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In respect of question nos. 1 and 4, we f

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

bottling charges (and certain agreed upon reimbursements, such as taxes and expenses). The CBUs after manufacturing the IMFL, deliver the said goods to buyers as per the applicant's directions and the sale price for the said goods is received by the Applicant. All the raw materials, packing materials, finished goods, scrap, etc. used by the CBUs are paid for, by the Applicant. From a perusal of the sample agreements submitted by the applicant, we find that the said agreements are on a principal-to-principal basis, the price at which raw materials are to be procured is fixed by the applicant, the risk, property and interest in the manufactured product passes from the CBU to the applicant upon delivery of the product to the carrier noaminated by the applicant, the selling price is as per the directions of the applicant, the sale price of the goods is received by the applicant, the applicant pays consideration to the CBU in the nature of bottling charges which are fixed on a per month

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Us to get the IMFL manufactured in under their brand name. There is no service rendered by the applicant in this case. It is very clear from the terms of the agreement that there is neither any supply of goods nor services flowing from the applicant. The applicant actually gets the products manufactured by the CBUs. Hence as per GST laws there is no supply of goods or services or both by the applicant as per Definition of 'supply' under section 7 of the GST Act, 2017, which reads as follows: – 'supply' includes (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. (b) …………………………. 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (under section 98 of the Central Goods and Services ax Act, 2017 and the Maharashtra Goods and Services T

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – GST – Dated:- 14-12-2018 – The month-wise gross collection of Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST) and Cess for FY 2017-18 and FY 2018-19 are as under: Month GST collection (in Rs. Crore) 2017-18 2018-19 April – 1,03,459 May – 94,016 June – 95,610 July – 96,483 August 95,633 93,960 September 94,064 94,442 October 93,333 100,710 November 83,780 97,637 December 84,314 – January 89,825 – February 85,962 – March 92,167 – Average 89,885 97,040 From the above Table, it is clear that GST collection in the current FY (2018-19) has been showing improvement compared to last FY (2017-18) except for the month of August, 2018. Further, in the absenc

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and ServicesTax Act, 2017 and the Integrated Goods and Services Tax Act, 2017, Union Territory Goods and Services Tax Act, 2017 and GST (Compensation to States) Act, 2017 have been passed by the Parliament and received the assent of the Hon ble President of India. For the period from 01.07.2017 to 30.11.2018, the figures pertaining to receipt and disposal of technical queries (Tickets) is as under: Received – 20,16,749 Resolved – 20,13,424 Certain representations have been received for rationalization of GST rates, seeking clarification on rates and to bring the petrol/diesel under the purview of GST Act. The GST Council has considered the requests from trade and industry and recommended certain reductions in GST rates on various goo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – GST – Dated:- 14-12-2018 – During the current financial year (between April 2018 to November 2018) 3196 cases involving an amount of ₹ 12766.85 Crore have been identified. Suspected GST Evasion amounting to ₹ 12766.85 has come to the light till the month of November, 2018. An amount of ₹ 7909.96 Cr. has been recovered during the period April 2018 to November 2018. The State-Wise details of detection of GST Evasion cases and recovery are as under: Detection Recovery Sr. No. Name of the State/U.T No. of Cases Amount (in Cr) No. of Cases Amount (in Cr) 1 Andhra Pradesh 38 359.01 26 235.68 2 Arunachal Pradesh 29 17.19 15 10.69 3 Assam 21 46.17 19 44.73 4 Bihar 182 490.01 167 484.02 5 Chhattisgarh 36 1

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-12-2018 – Company s Stand The company challenged the complaint on facts as well as legal grounds that the provisions of section 171 itself were illegal and unconstitutional which inter alia include, DGAP has conceded in his Report that the company had charged GST @ 5% to his consumers and therefore, commensurate benefit had been passed on to them. The DGAP had admitted that there was no incremental ITC available and therefore, no benefit was to be passed on by the company. Despite admission that section 171 nowhere aimed at price regulation and its purpose was only to ensure that benefit of reduction in the rate of tax or ITC was passed on to the recipients by way commensurate reduction in the prices, the DGAP had gone in to the computation of base price by invoking the marginal note, i.e. Anti-Profiteering Measure which was illegal. As per the settled law pronounced on the interpretation of the statutes, marginal no

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ring the same period, however, only the impact of ITC was considered. Increased input prices were to be considered as a mitigating factor (as also considered by NAA in KRBL case). While determining cost of a product, tax was just one component and the other factors had been ignored. DGAP had concluded that the turnover had increased by 24,81 ,33,857/- solely due to the increase in the base prices by 10.45%, which could not be taken as profit accruing to the company as there was increase in: (a) Royalty, as the company was paying royalty to McDonald's India Pvt. Ltd. which was 3.99% of the restaurant turnover and amounted to incremental royalty of 99,00,540/- on the incremental turnover attributed solely to the price increase during the year 2017-18 (b) Variable rent, which was 3.29% of the restaurant turnover, whereby he had paid an incremental rent of 81,63,604/- on the incremental turnover attributed solely to price increase during the above year, and (c) Other variable expenses

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

the audited financials which have been taken in to account by the Respondent for the year 2016-17 to forecast incremental tax cost. The calculation of the profiteered amount of ₹ 7.49 crores was not correct as the DGAP has ignored the reduction in the price made by him which had led to reduction in the profiteered amount and also due to the reason that the DGAP had calculated the profiteered amount @ 105%, i.e. base price + 5% GST when the 5% GST had already been deposited in the Government account and not retained by it and hence, no profiteering could be alleged. The relevant provisions of the CGST Act, 2017 or the CGST Rules, 2017 did not prescribe the methodology to be followed by the registered suppliers in order to comply with the anti-profiteering requirements. Rule 126 of the CGST Rules authorised NAA to determine the methodology and procedure to decide whether the reduction in the rate of tax or the benefit of input tax credit had been passed on by the registered person

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

uld be apportioned to the various segments of the business. Inferences from the Order Based on the order, the following assertion / inferences can be drawn : Complaints before NAA can be filed jointly by two or more complainants on mail or otherwise. Section 171 is attracted as soon as there is reduction in the rate of tax or the benefit of ITC is available and it is not dependent on whether the contract for supply is entered in to before tax reduction or availability of input tax credit had come into force and therefore, section 64A of Sale of Goods Act, 1930 is not applicable. Section 171 of CGST Act, 2017, nowhere provides for control on prices and its mandate is limited to ensuring that benefit of tax reduction and input tax credit is passed on to consumers by way of commensurate reduction in the prices. It is clear even from a cursory perusal of the provisions of Section 171 that they are completely unambiguous and clear and hence there is hardly any scope for misinterpretation of

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ot be considered as profit if it is illegally derived by appropriating the benefits which are granted by the Government from the public funds to the consumers. The benefit of reduction in the rate of tax as well as the benefit of ITC have been given by the Central as well as the State Government by sacrificing their own revenue in favour of the general public and the business entity has no right to appropriate them. The provisions of section 171 and the above Rules are very clear and unambiguous under which a comprehensive machinery comprising of the State specific Screening Committees, Standing Committee, Directorate General of Anti-Profiteering and Commissioners of Central GST and State Tax have been constituted/established under the above provisions to take cognizance of the complaints made on profiteering, their investigation and for enforcement of the orders passed by the Authority. The computation of the profiteered amount under Section 171 has to be done on the basis of the fact

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e price to be paid by them should have been further reduced by the amount of GST illegally charged from them. Depositing of such extra GST in the Government account can not absolve the company of the allegation that it had compelled the customers to pay more price than what they should have paid had the entity charged correctly and as such, it amounts to denial of benefit u/s 171 and not as per law. NAA can direct Central and State GST authorities to ensure that amount due is deposited with interest and in case it is not so deposited, they should take appropriate steps for recovery under the supervision of DGAP. DGAP may be asked to submit a report of compliance within time as stipulated. NAA can direct the authorities to issue a show cause notice for levy of penalty. NAA order may impose cost of litigation on the party(ies). Final Verdict The NAA while dealing with this complaint thus concluded that the company has resorted to profiteering by charging more price than that it could hav

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – GST – By: – Shashank Gupta – Dated:- 14-12-2018 – Determination and apportionment of input tax credit in respect of capital goods (Critical analysis of Rule 43 of Central Goods and Services Tax Rules, 2017) Input tax credit (the ITC) is the backbone of GST. In GST law as prevalent in India, on referring section 73 and section 74 of CGST Act, 2017 (the Act), one would appreciate that wrong availment of ITC is being treated as offence irrespective of it s actual utilization. In this article, rule 43 of CGST Rules, 2017 (the Rules) has been thoroughly discussed and critically analyzed so as to enable every reader to use this article as a ready reference. Rule 43 talks about ITC in respect of capital goods, so reference to any section in this article has been modified accordingly to concentrate on capital goods only. There are certain errors in drafting of rule 43, which we see with the flow of discussion. Issues to be analyzed Principles on the basis which rule 4

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

to the extent these are used for said purpose. If inward supply of capital goods is used for effecting zero rated outward supply then ITC shall be available in respect of such goods to the extent these are used for said purpose. If inward supply of capital goods is used for effecting exempt outward supplies then ITC shall not be available in respect of such goods to the extent these are used for said purpose. If inward supply of capital goods is used for non-business purpose then ITC shall not be available in respect of capital goods to the extent these are used for said purpose. Since this a settled position of law that a rule cannot override the provisions of Act, so in addition to above, ITC in respect of those capital goods shall also not be available which falls within the scope of section 17(5). This point has been focused specifically because rule 43 is silent on ITC of such capital goods. An express assumption taken by rule 43 (for commonly used capital goods) a capital goods h

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

soon as four conditions as specified in section 16(2) are fulfilled, if otherwise is not ineligible for credit. Let s analyze above concepts Situation-1 Suppose a capital goods was purchased and received on 20.07.2017 along with invoice of even date. IGST charged on invoice was ₹ 6,60,000. Till December 2017, it was being used for effecting exempt supplies. But from January 2018 to June 2018, it was used commonly for effecting taxable supplies, exempt supplies and for the purpose of business as well as non-business purpose. From July 2018 to September 2018, it was used exclusively for effecting taxable supplies. Turnover type January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 Exempt 4 crores 5 crores 2.5 crores 4 crores 2 crores 3.5 crores Non-business 1 lakh 1 lakh 1 lakh 1 lakh 1 lakh 1 lakh Total 10 crores 15 crores 10 crores 20 crores 11 crores 12.25 crores Since upto December 2017, it was being used for effecting exempt supplies, ITC would have not been tak

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

#425;A= Tc] shall be calculated as under – Input tax on such capital goods 6,60,000 Less: 5% for every quarter from date of invoice 66,000 (i.e., 6,60,000 × 5% × 2) TC = ƩA 5,94,000 Logically, if we exclude the proportionate exempt or non-business part from this ₹ 5,94,000, balance credit should be granted to the taxpayer. When we move further, we see an error in drafting of rule 43. Let s see this – As per rule 43(1)(e), proportionate monthly common credit (denoted by Tm; Tm = Tc / 60) on such goods shall be ₹ 9,900 i.e. 5,94,000/60 but it should logically be ₹ 11,000 i.e., 6,60,000/60. However, treatment given in rule is beneficial for the taxpayer. Let s see this – Proportionate exempt part i.e. common credit attributable towards exempt supplies denoted by Te shall be calculated as under – Te = (E÷F) × Tr as specified in rules logically Te = (4÷10) × 9900 = 3,960 Te = (4÷10) × 11,000 = 4,400 Where Tr = Ʃ

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ds to the extent these are used for said purpose. Since Act shall prevail, it is a suggestion that while calculating exempt turnover for the tax period i.e. January 2018 in our example, non-business turnover shall also be added. In this way, a reasonable amount attributable towards non-business purposes shall also be added to output tax liability. Non-business turnover can be determined by applying valuation rules. Calculation of ITC in respect of said commonly used capital goods from February 2018 to June 2018 Particulars Remark / calculation February 2018 (as per rules) March 2018 (as per rules) April 2018 (as per rules) May 2018 (as per rules) June 2018 (as per rules) Tr (Rs.) As per rules 9,900 9,900 9,900 9,900 9,900 +E (Rs.) As per rules 5 crores 2.5 crores 4 crores 2 crores 3.5 crores F (Rs.) As per rules 15 crores 10 crores 20 crores 11 crores 12.25 crores $ITC to be taken Nil Nil Nil Nil Nil *Amount to be added in output tax liability Te = (E÷F) × Tr (as per rules

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ases, proviso to rule 43(1)(d) has specified that in such case common credit (Tc) shall be calculated as under – Input tax on such capital goods – Less: 5% for every quarter lapsed from date of invoice – TC = ƩA – However, there is no need to take any ITC because ITC would have been taken on fulfillment of conditions of section 16(2) of the Act. Remaining procedure is exactly the same as discussed in situation-1. Note: in later part of this article, few situations have been discussed in respect of which law is silent. Impact of definition of quarter Definition of quarter as given in section 2(92) of the Act is equally important because as per definition, quarter is not a period of three months from one date to another date but is a period of three months being April to June, July to September, October to December and January to March between one date to another date. If we find out number of quarters from 27.09.2017 to 04.07.2018, then number of quarters as per definition shall be

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ed by 5% per quarter or part of the quarter? Whether ITC to be reversed shall be reduced by 1/60th per month or part of the month? Note: calculation on the basis of month may differ from the calculation on the basis of quarter. This becomes relevant to mention other related provisions like rule 32 where 5% per quarter has been used. similarly, again in rule 40, 5% per quarter has been used. But in rule 44, 1/60 per month has been used. This is matter of differences, so author reserves his views and leaves on learned members to decide on their own. When capital goods being used for common purposes are subsequently used exclusively for effecting taxable supplies Here actually, there is no need for specific provision because ITC would have already been credited in electronic credit ledger. When capital goods being used exclusively for effecting taxable supplies are subsequently used exclusively for effecting exempt supplies Undoubtedly, as per section 17(2) r.w. rule 43(1)(a), ITC shall b

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

de whether – Whether full ITC to be taken? Whether ITC to be taken shall be reduced by 5% per quarter or part of the quarter? Whether ITC to be taken shall be reduced by 1/60th per month or part of the month? Author s view is that one must choose between b & c. Other issues Section 17(3) states that exempt supplies shall include sale of land and sale of complete buildings. So now question here arises whether normal ITC shall get hit by rule 43? Here one has to see that if any capital goods are being used for effecting exempt supply then only ITC shall not be available. So, one has to see if any particular capital goods were used for sale of land/said building, then only ITC shall be hit by rule 43 which author thinks is unlikely. Likewise, one has to see for other exempt supplies like sale of duty scrips etc. For other important points of Rule 43, one may download complete article written by author (approved by IDTC of ICAI) from – https://idtc-icai.s3-ap-southeast-1.amazonaws.com/

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Customs – IGST Export Refund-extension in SB005 alternate mechanism revised processing in certain cases including disbursal of compensation cess-reg – TMI Updates – Highlights

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Started By: – P KUMARESHBABU – Dated:- 14-12-2018 Last Replied Date:- 14-12-2018 – sale of jewellery by bank / Nidhi companies through Auction- NPA by themselves or throgh agents. Whether GST will be applicable – Reply By Rajagopalan Ranganathan – The Reply = Sir, As per Section 7 (1) (a) of CGST act, 2017 supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be mad

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Profiteering – purchase of flats – The Respondent is not being asked to extend this benefit out of his own account and he is only liable to pass on the benefit of ITC to which

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Levy of GST – electronic commerce operator or not – money paid by the customer directly to the driver of the cab for the service of the trip – The applicant is liable to tax (

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Started By: – jeeshan ali – Dated:- 14-12-2018 Last Replied Date:- 14-12-2018 – one of my client has switched from regular to composition w.e.f. 1/8/2017 by filing CMP 02 while his CA has not filed ITC 03 and his composition levy was invalid because of his aggregate turnover of the preceding FY which was 103 lakhs. And now he filed only two quarters returns from july 17 to dec 17. while his turnover for the FY 17-18 was 120 lakh as per tax audit report and on which his VAT turnover was 65 lakh and GST turnover was 55 lakhs. Now please suggest me what should I do? As per my opinion now switching from composition to regular is the best option for him. – Reply By KASTURI SETHI – The Reply = First of all approach juris

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2018 (12) TMI 842 – KERALA HIGH COURT – TMI – Detention of goods with vehicle – detention on the ground that the petitioner did not upload the Part-B e-way bill – Held that:- The respondent authority is directed to release the petitioner's goods and vehicle on the petitioner's “furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules – petition disposed off. – WP (C). No. 40801 of 2018 Dated:- 14-12-2018 – MR DAMA SESHADRI NAIDU, J. For The Petitioner : ADV. SRI. S. ANIL KUMAR (TRIVANDRUM) For The Respondent : SC DR. ABRAHAM MEACHINKARA. AND GP DR. THUSHARA JAMES JUDGMENT The petitioner is a a goods transporting agency and an assessee under the

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of the Act based on Ext.P7 and Ext.P7(a); (iii) Issue a writ of mandamus or other appropriate writ, orders or directions, directing the respondent to release the goods to the petitioner without collecting any security under Section 129(1)(c). 3. The learned Division Bench of this Court in Renji Lal Damodaran Vs. State Tax Officer Judgment dated 6.8.18 in W.A.No.1640/2018 has dealt with an identical issue. 4. Applying the ratio of that judgment, I direct the respondent authority to release the petitioner's goods and vehicle on the petitioner's furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules . With the above direction I dispose of t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2018 (12) TMI 891 – ALLAHABAD HIGH COURT – TMI – Seeking Adjournment before AAR – Short period fixed for personal hearing – Classification of goods – Mahua De-oiled Cake – De-oiled Rice Bran – Input Tax Credit – purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacturer of solvent extracted oil – Held that:- Rejection of the adjournment sought for the first date fixed by the Appellate Authority, that too when the Appellate Authority itself could not convene or could not hear the matter for the first 60 days of the period contemplated under Section 101 (2) of the Act, appears wholly harsh and unreasonable on the part of the Appellate Authority to have refused the short adjournment sought, and to have proceeded to decide the appeal itself on merits.
–
The frequency and length of the sitting/s may be facts known only to the concerned authorities depending on the number of pending applications/appeals and availbility of the members on certain dates. Communication of the da

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

order dated 12.10.2018 passed by the Appellate Authority for Advance Ruling for Goods and Services Tax, Uttar Pradesh, by which the said Appellate Authority has upheld the order dated 25.05.2018 passed by the Authority for Advance Ruling, Uttar Pradesh, on two counts (that had been decided against the petitioner) and has partly modified the order of the original authority (on the issue that had been decided in favour of the petitioner). 2. Briefly, the petitioner is a manufacturer of vegetable oil. The petitioner filed an application under Section 97 of the Goods and Services Tax Act, 2017 (hereinafter referred to as the 'Act') before the Authority for Advance Ruling, seeking answer to the following questions: "1. Whether Mahua De-oiled Cake is classifiable under HSN 2309 being used as ingredient for Fish Feed, Fish farming and other aquatic uses? 2. Whether De-oiled Rice Bran is classifiable under HSN 2308 being used as an ingredient of Cattle Feed, Poultry Feed and other

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

hase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacturer of solvent extracted oil is partially allowed as per process/formula prescribed in the Chapter V (INPUT TAX CREDIT) of GST Rule, 2017, because, the applicant manufacturing both taxable and exempted goods by using raw materials viz. Mahua De-oiled cake and De-oiled Rice Bran. Further, if common inputs are used for both taxable and exempted supplies, the applicant is required to reverse the credit proportional to the amount of credit pertaining to the exempted supplies immediately." 4. Against the aforesaid declaration made by the Authority for Advance Ruling, the petitioner felt aggrieved. It filed an appeal under Section 100 of the Act, on 14.07.2018. 5. It is then stated that the first notice in the appeal proceedings was issued to the petitioner by electronic mail on 20.09.2018. Though receipt of the electronic mail is not disputed, it has been specifically stated in the writ petition that the email was issued to

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

October due to non availability of their counsel. As the Appellate Authority of Advance Ruling Uttar Pradesh consist of a member of the Central GST and a member of State GST and the appeal is to be decided in a time bound manner, it is not possible to extend the date of personal hearing to another date. So the appeal is being taken up for consideration based on the facts and documents available on record." 8. Thereafter, the Appellate Authority has proceeded to hear and decide the appeal on merits, which has given rise to the present writ petition. 9. Learned counsel for the petitioner has raised various grounds on merits to assail the order of the Appellate Authority as also the Authority for Advance Ruling. That challenge is not being referred to in view of the facts noted below. 10. Besides assailing the order on merits, learned counsel for the petitioner submits that there is a procedural lapse on part of the Appellate Authority in proceeding to decide the appeal on merits in

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

and in any case there was sufficient time available even after 26.09.2018 for the Appellate Authority to decide the appeal within the stipulated period. 12. Sri Dhananjay Awasthi, learned counsel for respondent no. 5, Sri Anant Kumar Tiwari, learned counsel for respondent no. 7 and Sri B.K. Pandey, learned Standing Counsel for respondent nos. 1, 2, 3, 4 and 6, would submit that the petitioner had adequate notice of the proceedings and it cannot complain that its appeal has been heard and decided on merits since it failed to respond on the notice for hearing. 13. Having heard learned counsel for the parties and having perused the record, in the first place, the Authority for Advance Ruling and the Appellate Authority have been constituted principally, to nip the litigation in its bud. Any assessee who seeks an advance ruling discloses his intent to avoid possible litigation, in future. He only seeks answer on an issue/question that potentially contains the seeds of future litigation. T

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

sessee may stay aware, both of the likely dates of sitting of authority and of hearing on his application/appeal and may arrange his affairs accordingly. 16. The frequency and length of the sitting/s may be facts known only to the concerned authorities depending on the number of pending applications/appeals and availbility of the members on certain dates. Communication of the date of hearing at short notice, without any prior indication of the same may often result in parties seeking adjounment for that reason itself. Therefore, a procedure providing for a prior indication of likely date of listing would be enough to put the applicants/appellants to notice in that regard, keeping in mind the spirit of the Act desiring speedy disposal of such matters. Also, the notice of exact hearing may be issued by electronic mail so as to preferably allow at least 21 days' or such time as may otherwise appear proper, feasable and reasonable in the interest of justice and fair procedure. 17. In c

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2018 (12) TMI 932 – CESTAT HYDERABAD – TMI – CENVAT Credit – duty paying invoices – denial on the ground that the subject invoices are debit notes which are not eligible documents for availing CENVAT credit in terms of Rule 9(1) of CENVAT Credit Rules, 2004 – Held that:- The Hon’ble High Court of Rajasthan in the case of Bharati Hexacom Limited [2018 (6) TMI 435 – RAJASTHAN HIGH COURT] held that CENVAT credit can be availed on the basis of debit notes. This is a binding legal precedent, ratio of which applies to the present case.
–
Denial of credit also on the ground that the appellant had not submitted debit notes before him – Held that:- Copies of these debit notes have now been enclosed in the paper book submitted by the appellant which contains all the relevant details. The service tax amount has been indicated in pen in these four debit notes but that should not be a limitation for availing of CENVAT credit and there is no requirement in the CCR 2004 that all the details of t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ount to M/s Coromandel International Limited, appellant availed CENVAT credit of the service tax paid on these debit notes. A show cause notice was issued on 10.09.2015 seeking to disallow the CENVAT credit availed by the appellant on the ground that the subject invoices are debit notes which are not eligible documents for availing CENVAT credit in terms of Rule 9(1) of CENVAT Credit Rules, 2004. The show cause notice also proposed to levy interest under Rule 14 of CCR 2004 read with Section 11AA of Central Excise Act, 1944. It was also proposed to impose penalty under Rule 15 of CENVAT Credit Rules, 2004. After following due process of law, the original authority confirmed the demand along with interest and imposed penalty on the appellant. Aggrieved, appellant appealed before the first appellate authority who, vide the impugned order, upheld the Order-in-Original and rejected the appeal. Hence this appeal. 3. Ld. Counsel for the appellant submits that although Rule 9(1) of CCR 2004 d

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2 (Tri.-Del.)] in which it was held that CENVAT Credit taken based on debit notes should not be denied when the eligibility of input service credit is not disputed. 4. Ld. DR reiterates the submissions of the lower authorities and argued that the credit has wrongly been availed by the appellant and accordingly the impugned order needs to be upheld and appal needs to be rejected. 5. I have considered the arguments on both sides and perused the records. The only point of contention is whether the credit can be allowed on the strength of four debit notes in question issued by M/s Coromandel International Limited in favour of the appellant, because (a) debit notes are not specifically included as valid duty paying document under Rule 9(1) of CCR 2004 and (b) whether the debit notes, while printed, do not indicate the amount of service tax paid and this amount has only been written in hand. The First appellate authority in the impugned order held that CENVAT Credit on the strength of debit

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

notes. This is a binding legal precedent, ratio of which applies to the present case. 6. The second ground on which the first appellate authority sought to deny credit is that the appellant had not submitted debit notes before him. Copies of these debit notes have now been enclosed in the paper book submitted by the appellant which contains all the relevant details. The service tax amount has been indicated in pen in these four debit notes but that should not be a limitation for availing of CENVAT credit and there is no requirement in the CCR 2004 that all the details of the invoice should be printed on a computer. There is no allegation in the show cause notice that service tax has not been paid by the service provider. 7. In view of the above, I find that CENVAT credit is admissible to the appellant on the four disputed debit notes and the impugned order is liable to be set aside and I do so. 8. The Impugned order is set aside and the appeal is allowed. (Pronounced in open court on

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2018 (12) TMI 939 – BOMBAY HIGH COURT – TMI – Penalty – delayed payment of duty – Held that:- Gujarat High Court in case of Banian & Berry Bearing Pvt. Ltd. Vs. UOI, [2002 (8) TMI 837 – GUJARAT HIGH COURT] observed that marginal delay of 2 to 10 days in making fortnightly payment on stray occasions, should not result into penal consequence. The Court had referred to Latin Maxim providing that minor lapses in law should not be visited with penalty.
–
It is declared that the petitioner shall not have to pay any further amount of penalty – petition disposed off. – WRIT PETITION NO. 14243 OF 2018 Dated:- 14-12-2018 – AKIL KURESHI & M.S. SANKLECHA, J.J. Mr. Rohan Deshpande I/b Alisha Pinto for the petitioner Mr. Pradeep S. Jetly for t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

the Joint Commissioner of Central Excise had quantified the sum at ₹ 57,076/, which comes to 25% of the penalty amount. It is undisputed that within 30 days of the receipt thereof, the petitioner did deposit a sum of ₹ 57,058/. Undisputedly, therefore, the petitioner was short of ₹ 18/of the requirement. The petitioner upon being pointed out, promptly deposited further sum of ₹ 20/and requested the Department to give benefit of reduced penalty. Under communicated dated 17.10.2017, which is impugned before us, such request was rejected on the ground that within the mandatory period of 30 days, the petitioner had not paid 25% of the penalty amount. Resultantly, the petitioner would have to pay remaining 75% penalty am

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

instead of challenging the adjudication and penalty imposed, if an assessee voluntarily deposits the duty and 25% of the penalty promptly, the remaining penalty would be waived. 4. We are conscious of the decision of this Court in the case of Commissioner of Central Excise, Raigad Vs. Castrol India Ltd. (2012) 286 E.L.T. 194, in which the Court has held that this period of 30 days for depositing 25% of the penalty is mandatory. However, the distinguishing feature in the said case was that the assessee had disputed the penalty and challenged upto CESTAT level and eventually when lost, sought the benefit of reduced penalty and offered to pay the penalty thereafter. On the other hand, in the decision of Gujarat High Court in case of Banian &a

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2018 (12) TMI 1084 – KERALA HIGH COURT – TMI – Appearance for the examination for “GST Practitioner” – declaration of result – Held that:- Initially, the petitioner apprehended that he would not get a chance to write the examination, because his application was processed beyond the cut off date. Now as a matter of policy, the first respondent has condoned the lapse and is allowing all other persons to write the examination. The petitioner has, however, already gone through that process and his results have been kept in the sealed cover.
–
It serves the interest of justice if the authorities declare the petitioner's result, in stead of giving him another opportunity of writing the examination – petition allowed by way of remand. – WP (

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

t off date. So he pleaded that unless he was permitted to take examination on 31.10.2018, he would suffer irreparable loss and hardship-affecting his career. 3. This Court, through an interim order dated 9th October 2018, permitted the petitioner to write the examination. He did write. And his result was put in the sealed cover. 4. Later, to rescue other applicants who registered themselves beyond the cut off date, the first respondent decided to conduct another examination on 17th December 2018. In other words, even if the petitioner had not filed this writ petition and had not got the interim direction to write the exam, he would have had the second opportunity: examination on 17th December 2018. 5. I reckon this second opportunity obviat

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2019 (1) TMI 420 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – TMI – Classification of goods – P.P. Bags which are made from strips having width of less than 5mm – whether the aforesaid PP bags would classify under chapter heading 63 or chapter 39 of the GST Tariff and what shall be the rate of GST on the same? – Notification No. F-A3-33-2017-1V (42) dt. 29.06.2017.
–
Held that:- The issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon’ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1989 (9) TMI 120 – HIGH COURT OF MADHYA PRADESH AT INDORE], where it was held that HDPE strips or tapes fall under the Head. 39.20, sub-heading 3920.32 of the Central Excise Tariff Act and not under Head. 54.06, sub-heading 5406.90. Similarly the HDPE sacks fall into Heading 39.23, sub-heading 3923.90 – thus it can be concluded that the impugned goods viz. PP Woven Bags/Sacks shall be classifiable under

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

refore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. QUESTIONS RAISED BEFORE THE AUTHORITY- In the application the applicant raised following question that Determination of classification of sacks and bags made from man made textile materials under GST tariff No. 6305 which falls under Serial No. 224 of Scehdule-I of Notification No. FA3-33-2017-1-V (42) dated 29.06.17 issued vide Madhya Pradesh Gazette . However at the time of personal hearing the applicant himself admitted that the question raised was not very clear so amended the question as follow – Determining the classification of P.P. Bags which are made from strips having width of less than 5mm. It is to be decided by the Hon ble Advan

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

the instant case, wherein the issue of classification of Sacks and Bags made out of Woven fabric}, already been decided. 5. The Hon ble Tribunal in the case of Gujrat Raffia Industries Ltd., V/s Commissioner of Central Excise = 2003 (1) TMI 146 – CEGAT, NEW DELHI has relied upon the decision of Hon ble Supreme Court in case of Commissioner of Commissioner of Central Excise Sup Shillong V/s Woodcraft Ltd., 1995 (77) ELT 23 (SC) = 1995 (3) TMI 93 – SUPREME COURT OF INDIA and has held that: any dispute relating to Tariff Classification must, as far as possible, be resolved with reference to nomenclature indicated by the HSN unless there be an expressed difference intentions indicated by the Central Excise Tariff Act, 1985 itself A reference to Explanatory Notes of HSN below Heading 63.06 covers a range of Textile articles usually made from strong industrially woven canvas. It, further mentions that tarpaulin are generally made of coated or uncoated manmade fibre, fabrics, or heavy to fair

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

g 39.26 wherein it is mentioned that this Heading covers articles, not elsewhere specified or included, of plastic (as defined in Note I to the Chapter) or other materials of Heading 39.01 to 39.14. It is also observed by the hon ble CESATE that awnings which are specifically mentioned in Heading No. 63.06, if made of plastic, are classifiable under Heading 39.26 as Explanatory Notes of HSN. 6. Similarly, the Hon ble High Court of M. P. in the case of M/s. Raj Packwell Ltd., V/s Union of India = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT has held that: In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2 (a) as under: – fibre means man made fibre including regenerated cellulose rayon, roan, nylon and the like. Textiles has been defined in Section 2 (g) as under: – Textiles means any fabric or cloth, or yarn or gannent or any other articles made wholly or in part of- (i) Cotton; or (ii) Wool; or (iii) Silk; or (iv) Artificial silk or other fi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A (i), even if at the intermediate stage articles classifiable under Item No.15A (ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A (i) and, therefore, the HDPE woven sacks should be considered as articles of plastic, 7. In view of the above the Hon ble Court has concluded that HDPE strips or tapes fall under the Heading 39.20, sub heading 3920.32 of the Central Excise Tariff Act and not under Heading 54.06, sub heading 5406.90. Similarly the HDPE sacks fall under Heading 39.23, subheading 3923.90. 8. Hence following the above referred judicial pronouncement, the HDPE/LDPE/LLDPE Sacks 86 Bags, which is made out of plastics are classifiable under chapter 3923 and similarly, Sacks & Bags, which is made out of manmade textiles materials are classifiable under chap

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

section notes, chapter notes and HSN Explanatory Notes are relevant : As per Notes given at Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 – Explanation IV- The rules for the interpretation of the first Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the section and chapter Notes and the general Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. In view of above Explanation it is thus absolutely clear that for the purpose of classification the Customs Tariff Act, 1975 has to be resorted too as the none of the tariff under IGST, CGST OR SGST has any Chapter Notes or Tariff notes tor determining the classification of goods. 5.3 Section XI of Customs Tariff Act, 1975 i.e. Textiles and Textile Articles of the Customs Tariff Act, 1975 under Sr. No. 1 states as under : This Section does not cover: (a) ………………… (b) ……………&he

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s the goods as : 5404 – Synthetic monofilament of 67 decitex or more and of which no cross-sectional dimension exceeds I mm; strip and the like (for example, artificial straw) of synthetic textile materials of an apparent width not exceeding 5 mm. 5.5 Further explanation to Note 1 (b) to Chapter 54 under Customs Tariff also states that – The terms man-made , synthetic and artificial shall have the same meaning when used in relation to textile materials. 5.6 The heading 54.04 of HSN also states that the heading covers : Strip and the like, of synthetic textile materials. – The Strip of this heading are flat, of a width not exceeding 5 mm. either produced as such by extrusion or cut from wider strips or from sheets. 5.7 The fabric manufactured from the above strips has also been classified under chapter sub heading 5407 as Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404. From the above it is thus absolutely clear that the strips o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

lip;………… 6305 20 00 – Of cotton – Of man-made textile materials: 6305 32 00 – Flexible intermediate bulk containers 6305 33 00 – Other, of polyethylene or polypropylene strip or the Like 6305 39 00 – Other 6305 90 00 – Of other textile materials Also serial No. 224 of Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 issued vide Madhya Pradesh Gazzette covers under chapter 63 the other made up textile articles and describes goods as under : Sr. No. 224 – Chapter Heading 63 Other made up textile articles, sets worn clothing and worn textile articles and rags, of sale value not exceeding ₹ 1000 per piece. 5.11 On the contrary 3923 of the Customs tariff covers the following goods : Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. 5.12 The Applicant submits that they are manufacturing strips having width of less than 5 mm which undoubtedly falls under chapter 5404. Also the woven fabric

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ated, coated. covered or laminated with plastics or articles of plastics covered under Chapter 39 [Note 1 (h) to Section M]. 5.14 It is pertinent to mention that the erstwhile Central Excise Tariff is absolutely same to Customs Tariff. In the case of Sunpak 2016 (343) ELT 201 (Tri-Chennai) = 2016 (1) TMI 919 – CESTAT CHENNAI, the tribunal while deciding classification of goods under erstwhile Central Excise Tariff in respect of same goods held as under : Para 8. Heard both sides and perused the records. The issue involved in the present appeals is regarding classification of DHPE warp knitted fabrics, HDPE ropes, strips, rachal knitted fabrics for agro products and wastes made out of plastic strip less than 5 mm in width. There were different practices for classification of plastic woven bags within the country. The Madhya Pradesh High Court in the case of M/s. Raj Packwell Ltd. = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT held that such bags are classifiable as other articles of pla

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

The products under question in the present appeals are not plastic woven bags. These are knitted fabrics used as agro net. Hence distinct from the plastic bags considered in the earlier cases. By taking into account the changes in the scope of the tariff heading and the item under consideration recently the Ahmedabad Bench of the Hon ble Tribunal in the case of Flora Agrotech Vs. CCE Vapi (2014 (11) TMI 114 – CESTAT AHMEDABAD) has held that such knitted fabrics are classifiable under 60059000. In this decision, the previous decisions of Madhya Pradesh High Court and the Board Circular have been distinguished. The appellants have also obtained the following certificates for classification of their products: 1. Certificate from Central Institute of Plastics Engineering and Technology dated 19.01.2015. 2. Certificate from Textiles Committee, Mumbai dated 05.03.2013. 3. Certificate from Sasmira dated 01.03.2013. These certificates confirm that the fabrics manufactured by the appellants ar

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

es it is relevant whether the CETA 1985, as existing now after its total alignment with the HSN, convey the meaning of Synthetic Textile Material. For this purpose, a reading of Chapter Note 1 of Chapter 54 of CETA 1985 is very relevant and is reproduced below:- Notes: 1. Throughout this Schedule, the term man-made fibres means staple fibres and filaments of organic polymers produced by manufacturing process, either: (a) by polymerization of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethanes, or by chemical modification of polymers produced by this process [for example, poly(vinyl alcohol) prepared by the hydrolysis of poly(vinyl acetate)]; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produ

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

A added to Chapter 54 of CETA 1985 was introduced w.e.f. 29.06.2010 and was made retrospective in operation. As per this chapter note filament yarn made from plastic or plastic waste have been considered to be textile materials. This amendment was not available in the statute books when judgment was delivered by M.P. High Court in the case of M/s. Raj Packwell Ltd. = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT which was followed by Rajasthan High Court and CESTAT benches. It is an undisputed fact that the plastic strips used in making the Knitted Fabrics Shed Net is less than 5 mm width. As per Section Note 1(p) of Chapter 39 strip of plastic less than 5 mm in width is not classifiable under Chapter 39 of the CETA 1985. As per Section Note 1(g) of Section XI of the CETA 1985 strips or the like of plastic 5 mm less are classifiable in Section XI (Textile & Textile Articles). By virtue of tariff description under Tariff Heading 54.04 of CETA 1985 plastic strip or the like upto 5 mm

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

than 5 mm. As per F.No.1(11)/2011/TTC/Vol.XX, dt.07.02.2012 written to the appellant by Assistant Director, Govt. of India, Ministry of Textiles, Office of the Textile Commissioner, Mumbai appellants unit has been registered as a technical textile unit in the records of the office of Textile Commissioner and has been allotted registration No.05152007. As per the Technical Textile literature issued by office of Textile Commissioner, Ministry of Textile, Govt. of India Agrotex includes technical textile products used in Agriculture horticulture (incl. floriculture), fisheries and forestry. Example of Agrotex technical textile include Shed nets, mulch mats, crop covers, anti hail nets, brid protection nets, fisheries nets etc. Further office of Joint DGFT Surat while issuing Authorisation No.5230009764 dt.15.11.2011 has held their product Warp Knitted Fabrics to be classifiable under ITCHS Code 60059000. As per Indian Standard ICS 59.080.70; 65.020.20 Agro Textiles-Shed Nets, for Agricu

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

se Tariff Act 1985. The Applicant submits that in view of above interpretation of tariff and the order given by the authorities. the Applicant prays the Hon ble Advance Ruling Authority to give its ruling on classification of PP Bags/ Sacks and the applicable rate of GST. DISCUSSIONS AND FINDINGS: 6.1 We have carefully considered the submissions made by the applicant in the application as well as in the additional submissions. We have also taken into account the submissions made before us by representative of the applicant at the time of personal hearing. We are also seized of the departmental view submitted by the CGST & Central Excise, Commissionerate, Indore. On the basis of records placed before us and the rival submissions, we proceed to decide the Application. 6.2 At the outset, we find that the question raised by the applicant falls under the provisions of Section of the CGST Act, 2017/ MPGST Act, 2017 as it relates to question regarding classification of goods. Thus we find

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

to be resorted to. However, we also observe that the applicant has been classifying the impugned product under Chapter 39 since long, and no cogent reason, whatsoever, has been adduced by the Applicant which prompted them to suddenly contemplate a change in established classification. Be that as it may, once we have admitted the application, we would venture into the subject keeping in view the technicalities and also the available judicial pronouncements. 6.5 We note that the applicant has very strongly built its case on the basis of Advance Ruling order passed by the learned Authority for Advance Ruling West Bengal in case of M/s. Mega Flex Plastics Ltd. Vide order no. 09/WBAAW2018-19 dtd.06.07.2018 [2018 (15) GSTL 90 (AAR – GST)] = 2018 (7) TMI 391 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL, where under the learned WBAAR has ruled that similar goods viz. Leno Bags would be classifiable under Chapter 63. The relevant portion of the ruling which was in reference to LENO bags is as u

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e heavily relied upon the order of Learned WBAAR, we do not find any reason to discuss the same as it has been already set aside and reversed by the learned WB Appellate Authority for Advance Ruling. To say in other words, the very edifice of the arguments made in application has lost its existence. 6.7 Coming to the issue raised by applicant, we find that the issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1990 (50) ELT 201 MP] = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT. While deciding the identical issue, the Hon ble High Court has observed In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2 (a) as under: – fibre means man made fibre including regenerated cellulose rayon, raon, nylon and the like. Textiles has been defined in Section 2 (g) as under: – Textiles means any fabric or cloth, o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

de. filament yarn but are articles of plastic. The circular of the Central Board of Direct Taxes dated 20.1.1985 also clearly says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A (i), even if at the intermediate stage articles classifiable under Item No.15A (ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A (i) and, therefore, the HDPE woven sacks should be considered as articles of plastic, Having so discussed the and defined the word Man Made Fibre and Textile for the purpose of arriving at the appropriate classification of HDPE Woven Bags/Sacks, the Hon ble High Court has opined; …………..the process of manufacture of HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the department clearly go to show that HDPE bags are the bags woven by plastic strips

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

hat the above said judgment having been passed by the High Court of Madhya Pradesh, is binding upon us as a matter of judicial discipline and we neither have any reason nor locus standi to disagree with the same. 6.9 To fortify our finding we also draw support from the judgment of the Hon ble Tribunal in the case of M/s. Gujrat Raffia Industries Ltd., v/s Commissioner of Central Excise on 14.1.2003 [Reported in 2003 (153). ELT 336 (Tri-Dell] = 2003 (1) TMI 146 – CEGAT, NEW DELHI. The Hon ble Tribunal in this matter has also held classification of similar goods under chapter 39 instead of chapter 63. 6.10 Following the ratio of the judgment of Hon ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1990 (50) ELT 201 MP] = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT as well as order dtd. 25.10.2018 = 2018 (11) TMI 663 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL of the learned West Bengal Appellate of Advance Ruling in case of M/s. Mega Flex Plastics Ltd

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2019 (1) TMI 1031 – GUJARAT HIGH COURT – TMI – Rectification of mistake – due to inadvertence, in paragraph 1 of the order dated 04.10.2018 made in Tax Appeal No. 320 of 2018, reference has been made to “Income Tax Appellate Tribunal” instead of “Customs, Excise and Service Tax Appellate Tribunal” – Held that:- In paragraph 1 of the order dated 04.10.2018 made in Tax Appeal No. 320 of 2018 instead of words “Income Tax Appellate Tribunal”, the words, “Customs, Excise and Service Tax Appellate Tribunal” shall stand substituted – The note stands disposed of. – R/TAX APPEAL NO. 320 of 2018 Dated:- 14-12-2018 – MS HARSHA DEVANI AND MR B.N. KARIA, JJ. For The Petitioner (s) : MR ANKIT SHAH (6371) For The Respondent (s) : NOTICE SERVED BY DS (5)

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2019 (2) TMI 404 – CESTAT CHENNAI – TMI – CENVAT Credit – input services – pest control services – site visit fee for national award bill (management consultancy) service – Held that:- The product stored by the appellant being sugar and is being used as input for aerated beverages which are used for human consumption, it is essential that the premises are to be kept pest free – the pest control services availed by the appellant are input services – credit allowed.
–
Fees paid by the appellant for site visit by officials of CII – Held that:- It is seen from the invoice that the site visit has been made in regard to National Award for Food Safety, 2014. Though in the invoices it stated that these are management consultancy service, it is neither the case of the appellant that they had requested for any management consultancy and the visit is indeed in respect of assessing the appellant with regard to giving an award. This can never be considered as input services – credit cannot be

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

llant for controlling pest in the said godown have been disallowed. He argued that it is highly necessary to keep the godown pest-free as the sugar is used as input for finished products which are used for human consumption. 2.2 With regard to site visit for national award bill, he submitted that the appellant s factory is a member of Confederation of Indian Industry (CII). The authorities below have allowed the credit on club membership fees whereas they have disallowed in respect of management consultancy service provided by CII. He adverted to the invoice issued in this regard and argued that the officials of CII had conducted site visit in regard to National Award For Food Safety 2014. This is actually in the nature of management consultancy services as the officials have given advice to appellant s factory as to the upkeep and running of the factory and also in regard to quality compliance norms. The visit having been made for giving advice in the nature of management consultancy,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

rvices have been availed by the appellant to make these premises pest free. The product stored by the appellant being sugar and is being used as input for aerated beverages which are used for human consumption, it is essential that the premises are to be kept pest free. For this reason, I am of the view that the pest control services availed by the appellant are input services and therefore the same are eligible for credit. The disallowance of credit is unjustified and requires to be set aside, which I hereby do. 5.2 The second issue is with regard to fees paid by the appellant for site visit by officials of CII. It is seen from the invoice that the site visit has been made in regard to National Award for Food Safety, 2014. Though in the invoices it stated that these are management consultancy service, it is neither the case of the appellant that they had requested for any management consultancy and the visit is indeed in respect of assessing the appellant with regard to giving an awar

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =