Goods and Services Tax – Levy of GST – landowner – The builder offered to develop and promote a multistoried residential apartment cum commercial building in the property – premises allotted to him, w
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Goods and Services Tax – Levy of GST – Construction services – relevant date of completion of construction of the property – If the entire consideration is received after the date of completion, then
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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 10-12-2018 Last Replied Date:- 10-12-2018 – In re Goa Tourism Development Corporation Limited – 2018 (11) TMI 1347 – AUTHORITY FOR ADVANCE RULING, GOA, the applicant is a Government company and registered under the provisions of GST laws. The applicant has executed concession agreement for renovation/development of their Anjuna property through private investment mode with Myrayash Hotels Private Limited, Mumbai on 09.12.2016. The agreement gives the right, licence and authority to construct, operate and maintain the project for a period of 30 years extendable by further period of 30 years totaling 60 years. The applicant collected one time upfront concession fees from Myrayash Hotels Private Limited @ ₹ 42,00,000 lakhs per year. The total fee is ₹ 25.2 crores was collected by the applicant from the said company. The said company may use the property of the applicant on the basis of Design, build, finance,
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by Notification No. 32/2017-CTR, dated 13.10.2017. The conditions for claiming exemption under this Notification are as follows- The exemption is for upfront payment. The lease shall be for a period of 30 years or more. The lease shall be for industrial development of infrastructure for financial business. The lease shall be granted by State Government Development Corporation or State Government undertaking by any other entity having 50% or more ownership of Central Government, State Government or Union territory Since all the above four conditions are satisfied the applicant is eligible for exemption from GST in respect of one time upfront concession fee received from the hotel. The Authority observed that the four conditions in the Notification are satisfied which are arrived at as follows- As specified in clause 4.1.3. of the lease agreement the upfront concession fee to the extent of ₹ 28 crores is payable to the applicant – The first condition of exemption is fulfilled sinc
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it is on record that- The service provider is an undertaking of Goa Government. The lease is made for 60 years. The long term lease shall be in respect of industrial plots or plots for development of infrastructure for financial businesses located in any industrial or financial business area . Either the Act or the concerned Notification does not define the expression industrial or financial business area . Therefore the Authority got the definition of the said expression from the Goa Industrial Development Act, 1965 . Section 2(g) of the said Act defines the expression industrial area as any area to be declared as industrial area by the State Government by Notification in the Official Gazette, which is to be developed and where industries are to be accommodated. The Authority considered that an area cannot be treated as industrial or financial business area merely on the ground that the area is being used for the purpose of industry/finance. The approval/declaration from the State Go
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whether GST can be levied and collected on the long term lease granted by Industrial and Development Corporation of MaharashtraLimited for 60 years.The High Court has observed the lease premium amount is a consideration and subject to GST. Section 142(10) of Central Goods and Services Tax Act, 2017 provides that if the contract is made in service tax regime and the service is provided in GST regime or the service is in nature of continuous supply of service, the same is liable to tax under GST Act. In the present case the lease agreement is made prior to GST regime and the service is to be provided for the next 60 years and it is a continuous supply of service. The Authority ruled that the same is liable to be taxed under GST. – Reply By Ganeshan Kalyani – The Reply = The industry to set up need permission from an appropriate authority who would be studying and considering various conditions. One of the condition would be the area in which the factory to be set up. I mean to say Govt w
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GST – Started By: – Kaustubh Karandikar – Dated:- 10-12-2018 Last Replied Date:- 13-1-2019 – If supply is to an EOU within the same state, CGST + SGST is to be charged or IGST being Deemed Export? – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = In my view it is deemed export. – Reply By KASTURI SETHI – The Reply = Yes. It is deemed export. Read Section 147 of CGST Act and also definition of ' deemed export'. – Reply By Kaustubh Karandikar – The Reply = My query is whether CGST + SGST is to be charged or IGST? – Reply By Alkesh Jani – The Reply = Dear Sir, In this case, my point of view is that, supplies to EOU unit is not zero rated supplies, if the EOU is within the same state, CGST+SGST is to be levied. Here it is important to
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EOU attracts GST. If Inter state – IGST and if intra State – CGST+SGST.The customer EOU can avail the Credit of GST and utilise it for payment of outward sales or claim refund of the GST paid on inputs under rule 89 (4) or he can ask the supplier to claim refund if he has neither availed the credit or claimed refund.We do supply to EOU within the state and we charge CGST+SGST on the invoice. The customer EOU avails the credit. RegardsS.Ramaswamy – Reply By YAGAY andSUN – The Reply = Supply to EOUs from DTA attract GST. Depending on Interstate or Intrastate supply the GST would be determined accordingly. Now either supplier or the recipient can file on line refund of GST on issuance of a declaration to either party. – Discussion-Forum – Kno
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2018 (12) TMI 651 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2019 (20) G. S. T. L. 146 (App. A. A. R. – GST) – Agricultural Produce or not? – Nature of warehoused goods – tea produce – Circular No. 16/16/2017-GST dated 15.11.2017 – whether the tea leaves of the various qualities, which is precisely black tea, procured in bulk either from public tea auctions or directly from manufacturers of tea in 50 Kg bags, after undergoing various stages of the processing as detailed above, by the appellant's client i.e. Unilever, for storage in the warehouse owned by the appellant are agricultural produce or otherwise?
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Held that:- The product being stored in the warehouse has got different name, character and uses from the green tea leaves which are cultivated in the tea gardens. Thus, the tea procured by Unilever is the manufactured product obtained from the different manufacturers – Thus, there is absolutely no doubt that the processes or treatments which are performed upon the
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on the green tea leaves do have bearing on the taste and colour of the tea, the appellant's contention that the above discussed processes carried out on the green tea leaves does not alter the characteristics of the tea is devoid of any merit and thus is not sustainable.
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In the said warehouses rented out by the appellant, the appellant's client Unilever have also been blending the tea of the various qualities and packing the same in the packets of specified quantity as per the order received from their overseas buyers of the tea product. The blending of tea of various qualities into different proportion depending upon the requirements of their overseas customers may be construed as manufacturing process as the said process imparts different flavour, colour to suit the need for their customers. Thus, the appellant's client Unilever is undertaking the said manufacturing process, thus changing the essential characteristics of agricultural produce further, in the warehouse rented ou
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UNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER PROCEEDINGS (under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act. The present appeal has been filed under Section 100 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 Nutan Warehousing Company Pvt Ltd (herein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-30/2017-18/B-38 dated 23.05.2018 = 2018 (8) TMI 1073 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA BRIEF FACTS OF THE CASE A. M/s. Nutan Warehousing Company Pvt Ltd, 1
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ods of all descriptions of agricultural and allied products. g) C. Appellant had been granted license for carrying out business of warehousing under the Bombay Warehousing Act, 1959. Accordingly, Appellant had constructed Warehouses at various places including warehouse at Fursungi, Pune (hereinafter referred to as the said warehouse). The Appellant had given on rent the said warehouse to M/s. Unilever India Exports Ltd (hereinafter referred to as Unilever) on specific compensation allowed under Bombay Warehousing Act. D. M/s. Unilever India Exports Limited (herein after referred to as Unilever ) procures tea of various qualities in bulk either from public tea auctions or directly from manufacturers of tea in 50 Kg bags and stores them in the said warehouse. Procured tea leaves normally undergo following standard processes prior to procurement- Tea leaves are plucked from the tea plants and the green leaves, plucked from the plants are not fit for the human consumption, it cannot be s
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process, as indicated above, at no point of time, crossed that limit and robbed the tea leaves of their character of being and continuing as such substantially. The process undertaken on green leaves consists of only above processes and not beyond them. E. The said procurement was undertaken during season. As per the specific order, M/S Unilever undertook blending and packing of the same at the said warehouse. After packing, tea was exported to overseas countries. F. Appellant is of strong view that the tea, procured in bulk, either from public tea auctions or directly from manufacturers of tea is an agricultural produce as defined in clause 2(d) of the Notification No. 12/2017-CT (Rate) dated 28.6.2017 because, it was not losing the essential characteristics of tea. G. Appellant claims that the storage and warehousing of tea is exempted vide Serial No 54(e) of Notification No. 12/2017- Central tax (rate). The said entry is reproduced as under- 54 Heading 9986 Services relating to cult
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uce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. H. The Appellant considers tea as an agricultural produce. Agricultural produce is defined as per clause 2(d) of the Notification No. 12/2017-CT (Rate) dated 28.6.2017 as under- agricultural produce means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market; I. Even though the blended and packed tea was kept for a very brief period but also the said activities of blending and packing were not taking away the essential characteristics of tea. Based on this understanding, the appellant were of the view that their activities of providing
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(rate) or otherwise. L. The advance Ruling authority had passed their order vide order No. GST-ARA-30/201718/B-38, Mumbai dated 23.5.2018 = 2018 (8) TMI 1073 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA denying the benefit of Serial No. 54 of Exemption Notification No. 12/2017-CT (Rate). Aggrieved by the said order, appellant has preferred the present appeal. Grounds of Appeal 1. Appellant warehouse had been used for storage of the procured bulk tea in 50 Kg bags for most of the time and not the blended and packed tea. 2. The authorities had held that the appellant warehouse had been used for storing tea after blending and packing by M/s. Unilever. The said observation is factually incorrect. The appellant had clearly mentioned that M/s. Unilever was procuring the tea from public auction in bulk in 50 Kg bags. After procurement, bulk tea was stored for a long time. When order is received, blending and packing is done and the packed products are despatched within 7-10 days. Based on this
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conveniently recorded that the case law relied by the appellant were not relevant, without discussing the same. 6. The appellant had relied on the several decisions including decision of the Supreme Court. The authorities have conveniently recorded that the case law relied by the appellant were not relevant without differentiating or recording any reason for nonrelevance of the same, based on facts or interpretation. Hence, the order passed is not a reasoned order and needs to be set aside, 7. The case law of Union of India Vs Belgachit Tea Co = 2008 (5) TMI 4 – SUPREME COURT and Brook Bond Lipton India Ltd = 1997 (11) TMI 499 – KARNATAKA HIGH COURT, are clearly distinguishable. In the case of Union of India Vs Belgachit Tea Co = 2008 (5) TMI 4 – SUPREME COURT and Brook Bond Lipton India Ltd = 1997 (11) TMI 499 – KARNATAKA HIGH COURT, issue before the Hon'ble Supreme Court was to ascertain whether the activity of M/s. Belgachit Tea Co was taxable under the Bengal Agricultural Inco
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ultural produce. The Hon'ble Supreme Court in case of COMMISSIONER OF SALES TAX, LUCKNOW Vs. D. S. BIST & ORS., = 1979 (9) TMI 168 – SUPREME COURT OF INDIA while deciding issue under UP Sales Tax Act, 1948 had upheld that Tea leaves after drying and processing remained agricultural produce. Similar view had been expressed by the Hon'ble Uttaranchal High Court in case of Dehradun Tea Company Ltd. vs State Of Uttaranchal And Ors.[2006 148 STC 56 Uttra] = 2006 (6) TMI 474 – UTTARAKHAND HIGH COURT. 10. Relevant issue is not the ascertainment of Income viz. agricultural or business but the retention of essential characteristic of tea even after various processes undertaken. 11. The authorities had heavily relied on the facts that whether the income arising out of the activity of the appellant is assessable as agricultural income or not? Though the income arising out of activity of trading of agricultural produce is not assessable as income from agricultural produce but the activ
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se 2(d) of the Notification No. 12/2017-CT (Rate) dated 28.6.2017 has three ingredients- a) The produce must emerge from cultivation of plants or rearing of all life forms of animals. b) Either no further processing is done or such processing is done as is usually done by a cultivator or producer on the said produce. c) The process undertaken does not alter its essential characteristics but makes it marketable for primary market. 14. The process undertaken on green leaves consists of only above processes and not beyond them. All the three ingredients are fulfilled in the present case. a) The produce must emerge from cultivation of plants or rearing of all life forms of animals- Green leaves are plucked from the tea plant. Hence the first condition is undoubtedly fulfilled. b) Either no further processing is done or such processing is done as is usually done by a cultivator or producer on the said produce. a. Tea leaves are plucked from the tea plants and the green leaves, plucked from
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out immediately, the entire tea leaves would be perished. The process, as indicated above, at no point of time crossed that limit and robbed the tea leaves of their character of being and continuing as such substantially. c. Unlike many agricultural products, tea-leaves are not marketable in the market, fresh from the tea gardens. Nobody eats tea-leaves. It is meant to be boiled for extracting juice out of it to make tea liquor. Tea-leaves are, therefore, only fit for marketing when by a minimal process, they are made fit for human consumption. Processes were necessary for the purpose of saving the tea-leaves from perishing, making them fit for transporting and marketing them. The process applied was minimal. Withering, crushing and roasting the tea-leaves will be surely necessary for preserving them. The process of fermentation or final roasting with charcoal for obtaining suitable flavour or colour and also the process of grading them with sieves were all within the region of minima
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e processes. At no stage, did it change its essential substance. It remained a tea leaf throughout. In its basic nature, it continued to be an agricultural produce. Thus, the condition of processes, not altering the essential characteristics of the agricultural produce is also satisfied. The processes undertaken makes it marketable for primary market. Primary Market had not been defined in the GST Act. In case of tea, primary market is a sale and purchase of tea in bulk from cultivator or producer. The said term primary market is indirectly defined in the definition of Buyer , given in Tea (Marketing) Control Order, 2003. The term buyer is defined under Rule 2(m) of the Tea (Marketing) Control Order, 2003 as under- ** Buyer means any person, firm, company, corporate body, cooperative society etc., including a consignee or commission agent, who receives tea by way of stock transfer from the manufacturer, with a place of business in tea in India, engaged in purchasing or procuring tea ei
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ions are issued using the subordinate legislative power and are tabled in parliament. Circulars are issued for clarifying the issue, which had been dealt in the Act/rule/notification in a legal language. Circulars are issued by authority expressing their view point. It cannot override the Notification. Any circular contrary to the law (including notification) is nonest in the eye of the law. It is neither binding on the department nor on the Assessee. The applicant intend to rely on the five member Hon'ble Supreme Court decision in case of CCE Bolpur Vs Ratan Melting & Wire Industries [2008 (231) ELT 22 (SC)] =2008 (10) TMI 5 – SUPREME COURT OF INDIA. 16. Circular No. 16/16/2017-GST dated 15.11.2017 is contrary to the Notification No. 12/2017-CT (Rate) dated 28.6.2017, hence not legal. The CBEC had issued Circular No. 16/16/2017-GST dated 15.11.2017 clarifying the scope of Entry at Sr.No. 54 of the Notification No. 12/2017-CT (Rate) dated 28.6.2017. The said circular had clarif
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321 (SC)] = 2012 (10) TMI 634 – SUPREME COURT OF INDIA. Hence, the order is not correct and needs to be set aside. 18. In 2002, an order No. 1/2002 was issued vide M.F. (D.R.) Order No. 1/2002-Service Tax, dated 1-8-2002 defining the agricultural produce and also specifically mentioning tea as an agricultural produce.. The said order is reproduced as under- In exercise of the powers conferred by sub-section (1) of section 95 of the Finance Act, 1994 (32 of 1994), (herein after referred to as the said Act), the Central Government hereby makes the following Order, namely :- 1. (1) This order may be called the Service Tax (Removal of Difficulty) Order, 2002. (2) This Order shall come into force on the 16th day of August, 2002. 2. (A) For the purposes of clause (87) of section 65 of the said Act, the expression 'agricultural produce means any produce resulting from cultivation or plantation, on which either no further processing is done or such processing is done by the cultivator lik
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h does not alter its essential characteristics but makes it only marketable and includes all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jaggery, raw vegetable fibres such as cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. (C) The above definition is same as given in Order No. 1 of 2002. The explanation inserted in the Notification No. 13/2003-ST dated 20.06.2003 had remain in effect till 30.6.2012. From 1.7.2012, agricultural produce was defined in clause 65(B)(5) as under- (5) 'agricultural produce means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market; The exclusion and inclusion mentioned in the defini
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definition of agricultural produce is reproduced as under- agricultural produce means any produce resulting from cultivation or plantation, on which either no further processing is done or such processing is done by the cultivator like tending, pruning, cutting, harvesting, drying which does not alter its essential characteristics but makes it only marketable and includes al/ cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jaggery, raw vegetable fibres such as cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. The above definition had three parts- a) Main part of definition b) Illustrative products by way of inclusion and c) Exclusion part The entries made in inclusive part of definition are only illustrative and do not expands the scope of the definition. Similarly exclusion part is also illustrative, w
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pite of the presence of 'manufactured products' in the exclusion part. Thus, as far as definition of agricultural produce is concerned, tea is not considered to be as manufactured product. Thus, tea was an agricultural produce covered in the main definition and continued to remain agricultural produce even after exclusion of the two parts (inclusion & exclusion) from 1.7.2012. 20. In light of the above, tea is an agricultural produce and its warehousing is exempted under E.No. 54(e) of the Notification No. 12/2017-CT. Personal Hearing 21. A personal Hearing in the matter was conducted on 20.11.2018 wherein Shri G.L. Navlakha and Shri Suresh Singh appeared on behalf of the appellant and reiterated the written submissions made at the time of the appeal. Shri Madan Deshmukh, Supdt., Division -I l, Pune -Il Commissionerate appeared on behalf of the respondent to defend the case and reiterated the same arguments which were earlier made before the Advance Ruling Authority. Discus
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not suitable for human consumption due to the presence of bitter taste inhered into it. The appellant further submitted that it is made suitable for consumption by subjecting the same under the various stages of processing, which are enumerated hereinbelow: (a) Exposing of the tea leaves under the sun or heating of the tea leaves for drying up; (b) Rolling of the dried up tea leaves by hand or machines to break the leaf cells and extracting juices or enzymes inhered into it; (c) Complete drying up by heating under the fire or sun or current of the hot air; (d) Fermentation of the tea leaves; (e) Sieving; (f) Roasting of the tea leaves with the charcoal to obtain the suitable flavour and colour. All these above processes are mostly carried out by the manufacturers after procuring the green tea leaves from the producers of the green tea leaves. Thus, as a result of the above enumerated processes, the tea leaves acquire the new flavour and colour and are now suitable for the human consump
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aves which are cultivated in the tea gardens. Thus, the tea procured by Unilever is the manufactured product obtained from the different manufacturers as per the submission made by the appellant themselves at para D above. Thus, there is absolutely no doubt that the processes or treatments which are performed upon the green tea leaves amounts to manufacture as per the definition provided in the clause 72 of Section 2 of the CGST Act, 2017, which are reproduced herein below: (72) manufacture means processing of raw material or inputs in any manner that results in emergence of new product having a distinct name, character and use …. The above fact is also acknowledged by the appellant in their submissions, wherein they have submitted that Unilever, their client to whom the warehouse is being rented out, have been procuring the tea of the various qualities either from the public tea auctions or directly from the manufactures of tea. 24. Now, we have to determine whether this manufacture
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It should be produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products; (ii) It should be subjected to either no further processing or such processing by the cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market; Now, subjecting the product in the question under the gauge of the above listed parameters, it is observed that though the product is a produce out of cultivation of the plants, the same is obtained as a result of the specific manufacturing processes, carried out by the manufacturers on the original agricultural produce i.e. green tea leaves for making them suitable for consumption by imparting the desired flavor and colour by the above discussed methods. All these processes, which change the characteristics of the green tea leaves, are carried out by the manufacturers and not the cultivators or the pro
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pellant, leaves no doubt in one's mind that they have lost the nature and characteristics of an agricultural produce in terms of the definition of 'agricultural produce' and are ready for secondary or tertiary market. The intention of legislature has never been to exempt agricultural produce at every stage. Had it been the case, then all agricultural produce, processed or manufactured by the person other than the cultivator or producers, would have been exempted from GST. However, that is not the case. As the unprocessed green tea leaves are exempted, while the Tea, whether or not flavoured (other than unprocessed green leaves of tea) are exigible to 5% GST. 27. The above findings is also amply substantiated by the fact that the unprocessed green leaves of tea falling under heading 0902 is subject to Nil rate of duty as per the Notification No. 2/2017-C.T. (Rate) dated 28.06.2017, while the processed tea which include the black tea, the product in question, falling under th
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ld by the advance ruling authority that the appellant warehouse had been used for the storage of the procured bulk tea after blending and packing by Unilever. The appellant has further contended that the warehouse had been used for storage of the bulk tea in 50 kg bags for most of the time and not for the blended and packed tea. However, as discussed in the above paragraphs, the bulk tea procured by Unilever before blending and packing itself does not fall within the definition of 'agricultural produce' as what is procured is black tea which Is processed out of green leaves. 29. In addition to the above discussions, we observe that in the said warehouses rented out by the appellant, the appellant's client Unilever have also been blending the tea of the various qualities and packing the same in the packets of specified quantity as per the order received from their overseas buyers of the tea product. The blending of tea of various qualities into different proportion depending
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e law of Union of India Vs Belgachit Tea Co = 2008 (5) TMI 4 – SUPREME COURT and Brook Bond Lipton India Ltd = 1997 (11) TMI 499 – KARNATAKA HIGH COURT, cited by the respondent is clearly distinguishable as the issue before the Apex court was not to decide whether tea is an agricultural produce or otherwise. In this regard, it is observed that though the issue was not to decide whether tea is an agricultural produce or otherwise, the Apex court had held that the activity of cultivation and sale of green tea leaves is falling under the agricultural activity and the activity of purchasing tea leaves and manufacture and sale of tea is falling under Business Activity for the purpose of computation of Income Tax under Income Tax Act. Thus, vide this judgement, the Apex court has clearly put the manufacturing activity in relation to the tea which include the various processes like drying, heating, fermentation, sieving etc. as discussed above, out of the ambit of the agricultural activity an
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ricultural produce vide this judgment. On going through the above cited Apex court judgement, it is observed that the facts and circumstances covered under the said Apex court judgment is entirely different from the facts and circumstances of the case in question as the party/assessee involved in the cited case was agriculturist, who was also the owner the tea gardens and was involved in the processes being performed on the green tea leaves produced by him, while in the present case, it is the manufacturers other than the cultivator or producers of the tea, who is undertaking various manufacturing processes to convert green tea leaves to the tea fit for human consumption. It is only after the manufacturing of the black tea from the green tea leaves, that Unilever is procuring the same for storage in the warehouse for further processing the same by way of blending and packaging prior to exporting the same to the overseas market. Thus, the above cited judgement relied upon the appellant
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2018 (12) TMI 724 – CESTAT CHENNAI – TMI – CENVAT Credit – inputs – fireworks purchased from their other units – Rule 16(1) of Central Excise Rules 2002 – Held that:- The definition of input show that not only the inputs that is used for manufacture of final products but also those goods cleared whose value is included in such final product will come within the definition of inputs. Further, all goods used in the factory by the manufacturer of the final product would come within the definition. This means any goods used by manufacturer within the factory is input. The words used are ‘by the manufacturer’ and not ‘for the manufacture’.
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The authorities below have erred in interpreting that in order to qualify as inputs, the goods have to be used for manufacture.
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Rule 16 speaks about situation wherein duty paid goods are brought into factory for refine, reconditioned or for any other reason – In the present case, the goods are not brought to the factory but they have been bou
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rn when being packed, the activity did not amount to manufacture as per Chapter Note to third schedule to CEA 1944. Such goods do not qualify as inputs and therefore the credit availed is not eligible. Show cause notices were issued proposing to demand the wrongly availed credit on inputs for different periods from 2013 – 14 to 2014 – 15 and May 2015 to December 2015. After due process of law, the original authority confirmed the demand of ₹ 16,66,248/- and ₹ 9,74,075/- for the respective periods along with interest and also imposed penalties. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of the appellant, Shri S. Ramachandran, ld. consultant appeared and argued the matter. He submitted that the appellant is engaged in manufacture of fireworks. They also purchase fireworks from their sister units and combine different varieties into a single gift pack‟ and are cleared as a single item by payment of excise duty. They availed credit
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hmd.) b. Manik Machinery Manufacturers Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai – 2016 (339) ELT 334 c. Commissioner of Central Excise Vs. Prime Healthcare Products – 2011 (272) ELT 54 (Guj.) d. G.S. Enterprises Vs. Commissioner of Central Excise, Jaipur – 2014 (313) ELT 340 (Tri. Del.) 3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order. He argued that since the goods were purchased from other manufacturers and brought into the factory for repacking, such unpacking or repacking does not amount to manufacture and therefore as per Rule 16(1) and (2), the appellants are not eligible for credit. 4. Heard both sides. 5. The allegation is that the appellants are not eligible for credit on the fireworks purchased from their sister concern / outside manufacturers. It is not disputed that the appellants after purchasing the fireworks from other manufacturers are packing it into a single unit / gift boxes along with their own manufactured fireworks. It is a
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authorities below have erred in interpreting that in order to qualify as inputs, the goods have to be used for manufacture. The said issue has been decided in the case of Manick Machinery Manufacturers P. Ltd. (supra), the relevant portion of which is reproduced as under:- 6. I find that the whole concept of Modvat/Cenvat scheme to avoid cascading effect of tax suffered on input. In that stream whatever input is going into final product either directly or indirectly, duty suffered on that input should be set off and only on value addition duty is levied. In the present case the playing cards even though it does not participate directly in the manufacture of final product i.e. spray guns but undisputedly the same is purchased by the appellant and expenditure of the same stands absorbed in the cost of the final product which ultimately suffered the duty as a whole, therefore in my considered view the playing cards which is supplied along with final product should be eligible for input c
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d by the assessee. The Hon ble High Court has allowed the Cenvat credit on the tooth brush considering it as input. As regard the judgments relied upon by the Ld. AR, I find that since there is reasoned judgment of the Hon ble High Court of Gujarat, it prevails over all the decisions given by the Tribunal, therefore following the Hon ble Gujarat High Court judgment, I am of the considered view that Cenvat credit in respect playing cards supplied by the appellant along with spray guns is admissible. The impugned order is set aside. Appeal is allowed. 6. The invocation of Rule 16 does not appear to be proper in the given set of facts of the case. Rule 16 reads as under:- RULE 16. Credit of duty on goods brought to the factory. – (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be enti
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s subsequently subject to such conditions as may be specified by the [Principal Commissioner or Commissioner, as the case may be]. The said Rule speaks about situation wherein duty paid goods are brought into factory for refine, reconditioned or for any other reason. In the present case, the goods are not brought to the factory but they have been bought by the manufacturer and the value of such goods have been included in the assessable value of the final product. The situation does not give raise to invoke Rule 16(1) at all. 7. In the other decisions relied by the appellant, the very same issue has been considered. After appreciating the facts of the case and the decisions cited by the appellant, I am of the view that the demand cannot sustain and requires to be set aside, which I hereby do. The appeal is allowed with consequential relief, if any. (Pronounced in court on 10.12.2018) – Case laws – Decisions – Judgements – Orders – Tax Management India – taxmanagementindia – taxmanage
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2018 (12) TMI 877 – PUNJAB AND HARYANA HIGH COURT – TMI – Permission to withdraw the appeal – Held that:- The appeal is dismissed as withdrawn – It shall, however, be open to the petitioner to take recourse to the remedies as may be available to it, in accordance with law. – CWP No. 31128 of 2018 Dated:- 10-12-2018 – MR AJAY KUMAR MITTAL AND MRS MANJARI NEHRU KAUL, JJ. For The Petitioner (s) : Mr. M.S. Sawhney, Advocate ORDER AJAY KUMAR MITTAL, J. (Oral) The petitioner has approached this Cour
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2018 (12) TMI 1005 – ALLAHABAD HIGH COURT – TMI – Condonation of delay in filing appeal – time limitation – Held that:- The delay in filing the appeal may not be condoned beyond the period of one month from the expiry of period of limitation, the phrase “communicated to such person” appearing in Section 107(1) of the Act commend a construction that would imply that the order be necessarily brought to the knowledge of the person who is likely to be aggrieved. Unless such construction is offered, the right of appeal would itself be lost though a delay of more than a month would in all such cases be such as may itself not warrant such strict construction.
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It is largely undisputed that the impugned penalty order was served on the driver
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peal beyond a period of 30 days from the date of the penalty order or 30 days from the date of service of that order on the driver of the truck who was found to be transporting the goods belonging to the petitioner assessee. 3. In this regard admittedly the petitioner is the owner of the goods. He had purchased certain goods from M/s Haryana Plasts Pvt. Ltd., Ladwa Road, Mathana, District Kurukkshetra vide Tax Invoice No.368 dated 10.02.2018. These goods had been consigned by driver of truck bearing registration No.HR- 69B0731. The aforesaid goods were subjected to seizure proceedings under Section 107 of UP Goods and Services Tax Act, 2017 (hereinafter referred to as the 'Act'). To that extent there is no dispute. 4. However, the p
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ppeal against the impugned order dated 06.07.2018 does not exist inasmuch as the Tribunal has yet not been constituted under the Act. That position is admitted to the State. Hence, while the present writ petition has been entertained on merits. 7. It is seen that the language of Section 107(1) of the Act provides for a period of limitation of three months from the date of communication of the order. Then Section 107(4) of the Act limits the period for which delay may be condoned in filing of such appeal to a period of one month and no more. 8. Keeping in mind the fact that the delay in filing the appeal may not be condoned beyond the period of one month from the expiry of period of limitation, the phrase "communicated to such person&qu
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2019 (2) TMI 436 – CESTAT HYDERABAD – TMI – Rectification of Mistake – error apparent in the face of record – Held that:- There was indeed an error. Accordingly, the title in the impugned order is rectified – ROM Application allowed. – Application No. E/ROM/30805/2018 And Appeal No. E/30498/2018 – M/30582/2018 – Dated:- 10-12-2018 – Mr. P. Venkata Subba Rao, Member (Technical) Shri N.V. Ramana Rao, Advocate for the Appellant. Shri B. Guna Ranjan, Superintendent/AR for the Respondent. ORDER Per: P.V. Subba Rao. 1. This application for rectification of mistake has been filed by the appellant against Final Order No. A/30753-30754/2018 dated 27.06.2018. 2. Learned counsel for the applicant submits that this order was issued against Appeal Nos.
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Goods and Services Tax – GST – Dated:- 9-12-2018 – It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/ building and ready to move-in flats where sale takes place after issue of completion certificate by the competent authority. GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale. Effective rate of tax and credit available to the builders for payment of tax are summarized in the table for pre-GST and GST regime. Period Output Tax Rate Input Tax Credit details Effective Rate of Tax Pre- GST Service Tax: 4.5% VAT: 1% to 5% (composition scheme) Central Excise on most of the construction material
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not increased as compared to pre- GST regime. Housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of State Government etc., attract GST of 8%. For such projects, after offsetting input tax credit, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST. For projects other than affordable segment, it is expected that the cost of the complex/ buildings/ flats would not have gone up due to implementation of GST. Builders are also required to pass on the benefits of lower tax burden to the buyers of property by way of re
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Goods and Services Tax – Started By: – Amit Satpute – Dated:- 8-12-2018 Last Replied Date:- 9-12-2018 – Dear sir,From my employee wrongly applied cancellation of Gst registration and jurisdiction officer approved application.the reason of cancellation submitted in applications turnover below than taxable limit But turnover is upto 11crore. Now how to revocation of cancellation of Gst registration. – Reply By YAGAY andSUN – The Reply = You may either go for an appeal or take a new registration o
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Goods and Services Tax – Started By: – SAFETAB LIFESCIENCE – Dated:- 8-12-2018 Last Replied Date:- 14-12-2018 – Dear Experts, Kindly let us know the maximum limit for availing ITC (IGST) from the date of invoice. – Reply By YAGAY andSUN – The Reply = September month or annual return which ever is earlier. – Reply By KASTURI SETHI – The Reply = I support the views of M/s.YAGAY And SUN, experts. – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = Whether you mean time limit? If so adopt the views of the experts. – Reply By Rajagopalan Ranganathan – The Reply = Sir, According to Section 16 (4) of CGST Act, 2017 A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or serv
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Goods and Services Tax – GST Annual Returns – Due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C extended till 31.3.2019 – TMI Updates – Highlights
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Goods and Services Tax – Classification of an item – tutty-fruity – Whether Tutti-fruity be classified under HSN 08111010 or 20060000? – The Tutti-frutti being the product of papaya is covered under C
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Goods and Services Tax – Classification of goods – rate of GST – the steam was generated out of waste cannot lead to the conclusion that the turbine is a renewable energy device. The same turbine can
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Goods and Services Tax – The two or more supplies of goods or services or both which are naturally bundled in which the principal supply is exempt and others are taxable can be treated as a composite
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Goods and Services Tax – Profiteering – benefit of tax reduction not passed on to the recipients – Nestle Munch Nuts 32 Gm. Chocolate – Cadbury Dairy Milk Chocolate – assessee directed to pass on the
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Goods and Services Tax – Profiteering – benefit of tax reduction not passed on – Johnson & Johnson Baby Shampoo 100 ml. – assessee had deliberately charged the enhanced prices with an intention to poc
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Goods and Services Tax – GST – Dated:- 8-12-2018 – FORM GSTR-9 as part of the CGST Rules. notification no. 49/2018-Central Tax, dated 13.09.2018has been notified vide FORM GSTR-9C while notification No. 39/2018-Central Tax, dated 04.09.2018have been notified vide FORM GSTR-9A and
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Goods and Services Tax – Started By: – Kaustubh Karandikar – Dated:- 8-12-2018 Last Replied Date:- 9-12-2018 – XYZ is a proprietor of an ENT Hospital. The income generated by the hospital along with the proprietor s other income such as earning through Residential premises given on rent, capital gains, bank interest, FD interest, interest on loan given to a company, interest on PPF and dividend etc. 1) Can XYZ obtain GST Registration voluntarily, despite no statutory obligation? If yes, 2) will XYZ able to take credit of inputs / input services and later claim refund as there are no taxable outward supplies? – Reply By KASTURI SETHI – The Reply = Dear Sir, There is no restriction on voluntary registration under GST but GST cannot be collec
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 8-12-2018 – In over a dozen of complaints adjudicated by National Anti-profiteering Authority (NAA), majority of the cases have been decided in favour of trade and industry and against the complainant, for want of evidence or complaint proved to be non sustainable. In yet another case of Fabindia Overseas Pvt. Ltd. Hyderabad, the NAA has ordered in favour of Fabindia ruling that there is no contravention of section 171 of the CGST Act, 2017 as profiteering was not established. In Mandalika Sakunthala, Hyderabad and DGAP, New Delhi v. Fabindia Overseas Pvt. Ltd., Hyderabad (2018) 11 TMI 1011 (NAA), the NAA vide its Order dated 16.11.2018 has concluded that the complaint was based on wrong pre-GST tax rates in respect of two items, viz, bathing bar and instant drink power (50gms) and as such, there was no case for charging more rate. Infact, for both the products being procured by inter-state sale from sole vendors, post
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ll being sold at the above MRP by increasing their base prices. Thus, the company had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017 and therefore, action should be taken against it. The complaint was examined and investigated as per procedure. The company submitted that there was increase in the rate of tax and hence no benefit could be passed on by it and that it was procuring both the products on inter-state basis from their sole vendors and his tax liability had increased by 3.5% post implementation of GST from 14.5% VAT to 18% GST w.e.f. 01.07.2017 and therefore, it had suffered loss in his margin on sale of both the products. It also submitted that MRP of the products sold by the company was constant for the last 3 years and there was no rate reduction or increase, after implementation of the GST although the rate of tax had increased. It was reveled in investigation that Value Added Tax (VAT) was applicable on these products @ 14.5%.
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o ₹ 80.51 by suffering loss of ₹ 2.46 per bathing bar in gross margin during the GST regime. According to DGAP report, as the reduction in the base price was more than the lTC, the allegation of profiteering was not established. In case of Milk powder, there was no change in it he ITC and the company s cost price had remained the same at ₹ 18.86. When the sale of old pre-GST stock of the above product in the GST era was compared with the sale in the pre-GST regime, although the rate of tax had increased from 14.5% to 18% after the implementation of the GST the company had still sold the above product at the same MRP of ₹ 501-, by reducing his base price from ₹ 43.67 to ₹ 42.37 and had thus suffered a loss of ₹ 1.30 in his gross margin in the GST regime. In this case also since the base price had been reduced to maintain the same MRP inspite of increase in the tax rate, the anti-profiteering provisions contained in Section 171 (1) of the CGST Ac
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Goods and Services Tax – Lexicon – Goods and Services Tax – GST – Dated:- 7-12-2018 – Download PDF – News – Press release
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Goods and Services Tax – Started By: – narednra gatagat – Dated:- 7-12-2018 Last Replied Date:- 11-12-2018 – SIR I AM A EDUCATIONAL BOOKS PUBLISHERS I PAY ROYALTI TO AUTHOR GST APPLICABLE OR NOT APPLICABLE ON ROYALTI UNER RCM CLAUSE 9 (3) OR 9 (4) – Reply By KASTURI SETHI – The Reply = It is covered in Serial No.9 of Notification No.13/2017-Central Tax (Rate) dated 28.6.17 as amended. read with Section 9(3) of CGST Act, 2017 is applicable. It is taxable under RCM. – Reply By Ganeshan Kalyani –
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GST – Started By: – Kaustubh Karandikar – Dated:- 7-12-2018 Last Replied Date:- 17-1-2019 – XYZ is a Doctor (Proprietor) is running an ENT Hospital. Apart from his income from the hospital which is exempted from GST, he is also earning through Residential premises given on rent, capital gains, bank interest, FD interest, interest on loan given to a company, interest on PPF and dividend. All these incomes including from the hospital are exempted but is crossing the threshold limit of ₹ 20 Lacs. Is XYZ required to obtain GST Registration? – Reply By KASTURI SETHI – The Reply = Not required. See the definition of the term, Aggregate turnover under Section 2(6) of CGST Act,2017. 6) aggregate turnover means the aggregate value of all taxa
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Goods and Services Tax – GST – By: – Sachin Jain – Dated:- 7-12-2018 – Audit Under GST Regime Audit this word is well versed within the industrial and commercial world, where an ordinary man interprets it as a compliance measure or activity to be done on yearly basis and on the other hand big players are well aware about the importance of audit. As we all know GST rolled in July 2017, it is also known as the biggest indirect tax reform in the Indian history. GST is a revolutionary in commodity and services tax. It has brought about an ideal shift in the methodology of levy and collection of taxes. GST being a self-assessment tax, audit procedures are introduced for ensuring proper compliance. Under the earlier Central Excise and Service Tax laws, there was no requirement for audit of accounts and furnishing reconciliation statement by an accountant except special audit. However, some state VAT laws stipulate audit of records by a Chartered Accountant and filing of VAT audit reports. T
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l year with the audited annual financial statement. So audit report is to be provided at the time of filing annual return. Key points * Turnover includes value of all exempt supplies and exports under the same PAN, on all India basis. * GST period comprises of 9 months i.e. July 2017 to March 2018, whereas the relevant section 35(5) uses the expression financial year, it is reasonable to understand that the turnovers for the whole of the financial year would also include the first quarter of the financial year 2017-18. However, clarification is required in this case from the government. The GST Audit would be undertaken for the first time in India. GST Audit will require a huge preparation from both the auditor and the auditee. It is different form Statutory audit and Tax audit. GST audit would require coverage of a larger number of records. The GST audit requires deep understanding of the GST laws the working of GST portal, the nature of supplies, various records of the auditee. Also,
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, exempt supply, registered and unregistered dealer etc. This again added to the compliance. A series of aspects need to be considered while preparing the following reconciliations; Reconciliation of GST Outward Supply i.e. GSTR-1 (Taxable, exempt, export etc.) with books of account; Reconciliation of GSTR- 2A with Input Tax Credit (ITC) availed in GST Return; Reconciliation of outward supply and ITC between GSTR-3B, GSTR-1 and Books of account; Reconciliation of GST Payable between GSTR 3B and books. Reconciliation of Taxable Turnover; Reconciliation of rate wise liability and amount payable thereon; Reconciliation of ITC declared in Annual Return (GSTR-9) with ITC availed on expenses as per audited Annual Financial Statement or books of account. (with various subheads of profit and loss account); Reconciliation of expenses subject to reverse charge as per books of accounts and GSTR 3B; Reconciliation of balance in E-Cash ledger, E-credit ledger, E-liability ledger with books. Key poi
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availed; Check all ITC which is not allowed as per section 17(5) of the CGST Act.; A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note pertaining to FY 2017-18 after filing GSTR 3B of September 2018. Given this, the taxpayer should identify all the invoices of inwards supply where ITC is not availed; It is to be noted that once the same is not availed it will become the cost for the Company; The ratio of reversal of ITC is required to recomputed on the basis of yearly details of supply and effect of the must have been considered while finalizing books; The taxpayer shall identify ITC where vendor s payment is pending for more than 180 days from the date of invoice; The amount of such ITC pertaining to FY 2017-18 must have been reversed along with interest on or before September 2018, the auditor should verify the same. Others The entity should also ensure the proper classification of goods and services and respective rate (mainly i
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not involve any estimate or the opinion; on the other hand A Report, on the other hand is a formal statement usually made after an enquiry, examination or review of specified matters under report and includes the reporting auditor s opinion thereon. Thus, where a certificate is issued the auditor shall be responsible for accuracy of what is stated therein. In case of a report, he is responsible for ensuring that the report is based on the factual data, true and fair to the best of his belief, knowledge and information furnished to him. Other types of Audit under GST Audit u/s 65 Audit u/s 66 1) Not compulsory, audit only for selected registered person only (By general or special order) 2) Audited by commissioner or officer authorized by him. 1) Not compulsory, audited id special direction issued by officer considering complexity of case. 2) Auditor to be nominated commissioner. Future Prospects GST and the structure of GST having compliance measures such as GST audit provides a very f
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