The due date for submitting FORM GSTR-7 for January 2019 has been extended to February 28, 2019.
Notifications
GST
Due date for furnishing of FORM GSTR – 7 for the month of January, 2019 ex
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Section 173 of U.P. GST Act 2017 removes municipal power to levy Advertisement Tax, overriding U.P. Municipalities Act 1916.
Case-Laws
GST
Coupled with the fact that the power of taxation earlier vested with the municipalities u/s 128(2)(vii) of the U.P. Municipalities Act, 1916 having been omitted by virtue of Section 173 of the U.P. Goods and Service Tax Act, 2017, the municipality did not even have the statutory competence to levy, impose or collect Advertisement Tax.
TMI Updates
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Section 83 CGST Act: Provisional Property Attachment Not Applicable to Directors of Private Companies at Current Stage.
Case-Laws
GST
Provisional attachment of property – invocation of provis
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GST on forfeiture
Query (Issue) Started By: – Rachna Gaur Dated:- 9-2-2019 Last Reply Date:- 10-2-2019 Goods and Services Tax – GST
Got 1 Reply
GST
In case BG in the form of performance security is forfieted due to non performance of contract amounts to GST liability.
And if liable then the vendor will claim the input , but this being such forfeiture of panel nature , how can GST input be given to such vendor
Plz reply on such issue…
Reply By KASTURI SETHI:
The Reply:
2018 (1
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HSN for Membership of Club/Guest House
Query (Issue) Started By: – Ritesh Mehta Dated:- 8-2-2019 Last Reply Date:- 9-2-2019 Goods and Services Tax – GST
Got 2 Replies
GST
What would be the HSN/SAC for membership of a club/guest house?
What would be the nature of tax (S+C or I – GST) if the booking office is in one state (Say Maharashtra) but the property is located at another state (Say Karnataka) and the customer is located in Maharashtra?
Reply By KASTURI SETHI:
The Reply:
Chap
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Analysis of GST Revenue Collections for Fiscal Year 2018-2019 Reveals Significant Trends and Adjustments in Revenue Expectations.
News
GST
GST Revenue Collections and revised estimate for the
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New Return Filing System of GSTN
GST
Dated:- 8-2-2019
GSTN will focus, amongst others, on the development of new return filing, further improving the user interface, and Business Intelligence and Analytics. Improvement in User Interface on the basis of feedback is a continuous process. Few important initiatives/improvements made for better User Experience are:
(i) Questionnaire for filing GSTR-3B to avoid errors by taxpayers.
(ii) Option to generate pre-populated Challan by the system to avoid depositing Cash in wrong Head by the taxpayers.
(iii) Introduction of one click Nil return filing.
(iv) Suggested utilisation of ITC informed to the taxpayer for discharging tax liability.
(v) Contextual help for GST transactions li
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GST Revenue Collections
GST
Dated:- 8-2-2019
Considering present trend in the Monthly Collection of GST revenue, the changes in Revised Estimates vis-à-vis Budget Estimates for the FY 2018-19 are as under:
Goods and Services Tax (GST) (in Rs. Crore)
Budget 2018-2019
Revised 2018-2019
CGST
603900
503900
IGST
50000
50000
GST Compensation Cess
90000
90000
Total
743900
643900
It is further submitted that the Month-Wise Gross Collection of Central Goods and Servic
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ACCOUNTANT
Query (Issue) Started By: – rajesh subramanian Dated:- 8-2-2019 Last Reply Date:- 9-2-2019 Goods and Services Tax – GST
Got 3 Replies
GST
Dear sir,
We are pvt Ltd, 100 % EOU , and hiring consultancy service FROM AN FOREIGN INDIVIDUAL who is having PAN
for this transaction we need to pay GST under RCM?
Please guide us
Rajesh.S
ETAPL – Ph : 9943413496
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
Whether the said foreign individual is in India or abroad? Whether he
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BUSINESS PROMOTION
Query (Issue) Started By: – VIBHUKUMAR SANGAL Dated:- 8-2-2019 Last Reply Date:- 11-2-2019 Goods and Services Tax – GST
Got 6 Replies
GST
We have given a Party for Business Promotion. This party has organised by a event organiser. In which, they organised food, musician, music & dance. They have given us Bill with GST. Can we take GST Input on the same Bill.
Reply By KASTURI SETHI:
The Reply:
Not allowed. It is an uphill task to prove that party was given in the course of business or furtherance of business (taxable). Under Section 155 of CGST Act, the burden of proof is cast upon the person to the effect that ITC was availed correctly. It will be a hard nut to crack.
Reply By DR.MARIAPPAN GOVINDARAJAN:
T
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Revenue Authorities Ordered to Unseal Business Premises Over Authorization Concerns; Access Was Not Denied by Petitioner.
Case-Laws
GST
Jurisdiction – power of respondent to seal the business
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Court Dismisses Challenge to GST Act Entry 5(b) on Land Valuation for Construction as Premature.
Case-Laws
GST
Levy of tax on construction activities – value of the land at one-third of the t
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CHANGE IN PAYMET/ SET OFF RULES UNDER GST FROM 1ST FEBRUARY 2019: DOES IT RESULT IN BLOCKAGE OF WORKING CAPITAL?
By: – Vivek Jalan
Goods and Services Tax – GST
Dated:- 8-2-2019
On and from 1st February 2019, The Order for availing the set off of ITC has been changed and new Sections 49A & 49B under The CGST Act 2017 have been made effective. Let us analyse the impact of the same on Trade & Industry –
The Amendment –
21. After section 49 of the principal Act, the following sections shall be inserted, namely:
“Utilisation of input tax credit subject to certain conditions.
"49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.
Order of utilisa
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Portal Constraint. Whether the same would be challenged in future is a matter to be seen.
Sec 49B has further given the opportunity to the Govt. To make any amendments in this order of Utilization also in time to come. Hence we may see further amendments vide Rules in this hierarchy of utilization of ITC also. Possibly the constraint in “1b” above that CGST of one state can't be adjusted against CGST of another state may be done away with the help of the GST Portal.
Now, lets analyse the possible impact of the insertion of Section 49A of The CGST Act 2017 from 1st February 2019 –
* Rules of Set Off till The Month of January 2019 –
Payment for
First set off from
Then set off from
IGST
IGST
CGST and SGST
CGST
CGST
IGST
SGST
SGST
IGST
Example 1 (When there is no liability of IGST but there is ITC of IGST) –
ITC
ITC Amount
Liability
1st Adjustment
2nd Adjustment
Balance to Pay in Cash
Balance ITC
IGST
100
–
–
–
–
–
CGST
100
150
₹ 150-100 (CGST
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ITC of IGST) –
ITC
ITC Amount
Liability
1st Adjustment
2nd Adjustment
Balance to Pay in Cash
Balance ITC
IGST
100
50
₹ 50-50 (IGST)
–
–
–
CGST
100
150
₹ 150-100 (CGST )
₹ 50-50 (IGST)
–
–
SGST
100
150
₹ 150-100 (SGST )
–
–
50
Hence we can see from the above that the Cash Flows of some dealers might be stuck due to the above change.
[Mr. Vivek Jalan is a Fellow Member of the Institute Of Chartered Accountants of India (ICAI) & a qualified LL.B. He is the member of The CII- Economic Affairs & Taxation Committee. He is the Co Chairman of The Indirect Tax Committee of The Bengal Chamber of Commerce and Industry. He is also a visiting faculty for Indirect Taxes in The Bengal Chamber of Commerce and Industry, Institute Of Chartered Accountants of India and Institute of Cost Accountants of India. He has 8 books on Taxation and has written more than 100 articles on varied Topics. He is regularly representing critical cases before the Ho
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Seeks to extend the due date for furnishing of FORM GSTR – 7 for the month of January, 2019 till 28.02.2019
08/2019 Dated:- 8-2-2019 Central GST (CGST)
GST
CGST
CGST
Superseded vide Notification No. 26/2019 – Central Tax dated 28-06-2019
Government of India
Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes and Customs]
Notification No. 8/2019 – Central Tax
New Delhi, the 8th February, 2019
G.S.R. 101 (E).-In exercise of the powers conferred by s
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M/s Pankaj Advertising Prop. Through Its Prop. Versus State of U.P. And 7 Others
GST
2019 (2) TMI 426 – ALLAHABAD HIGH COURT – 2019 (24) G. S. T. L. 162 (All.) , [2020] 73 G S.T.R. 235 (All)
ALLAHABAD HIGH COURT – HC
Dated:- 8-2-2019
Writ Tax No. – 577 of 2018
GST
Pankaj Mithal And Pankaj Bhatia JJ.
For the Petitioner : C.K.Parekh,Vikas Rastogi
For the Respondent : C.S.C.,Sahab Tiwari, Saurabh Tiwari
ORDER
(Delivered by Hon'ble Pankaj Bhatia,J.)
Heard Sri C.K. Parekh, learned counsel for the petitioner, Sri Avinash Chandra Tripathi, learned Standing Counsel and Sri Sahab Tiwari, learned counsel appearing for Nagar Palika Parishad, Hathras, (respondent nos. 2, 3 and 4).
The present writ petition has been filed seeking to declare the Nagar Palika Parishad Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 as ultra-vires of the provisions of Uttar Pradesh Goods and Service Tax Act, 2017; U.P. Municipalities Act, 1916 and Articles 1
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, Hathras on 12.1.2017 and published on 19.8.2017, a demand of advertisement tax on Hoardings/Sign Boards/Glow Signs affixed at various places including on the private buildings was sought to be recovered from the petitioner.
The petitioner therefore challenged the legislative competence to the imposition, collection and realization of the Advertisement Tax under the U.P. Municipalities Act, 1916 alleging that when there is no provision to impose such a tax there can be no power to frame any bye-laws in that regard.
The issue relating to the power of the municipality to levy and collect Advertisement Tax has a chequered history. Prior to 2011, the municipalities in exercise of their powers under the U.P. Municipality Act 1916 sought to levy and recover Advertisement Tax, which was challenged before the High Court, Allahabad by means of Writ Petition No. 7848 of 2010 (M/B) Bharti Airtel Limited through its Authorised Signature vs. State of U.P. And others, the said petition came to be
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i) a tax on the annual value of buildings or lands or both.
(ii) a water tax on the annual value of buildings or lands or both;
(iii) a drainage tax on the annual value of buildings leviable on such buildings as are situated within a distance, to be fixed by rules in this behalf for each municipality from the rearest sewer line;
(iv) a conservancy tax for the collection, removal and disposal of excrementious and polluted matter from privies, urinals, cesspools;
(2) In addition to the taxes specified in sub-section (1), the Municipality may, for the purposes of this Act and subject to the provisions thereof, impose any of the following taxes, namely :-
(i) a tax on trades and callings carried on within the municipal limits and deriving special advantages from, or imposing special burdens on, the municipal services;
(ii) a tax on trades, callings and vocations including all employments remunerated by salary or fees;
(iii) a theatre tax which means a tax of amusements or entertainm
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vide that the municipal taxes shall be assessed and levied in accordance with the provision of this Act and the Rules and bye-laws framed thereunder.
The said amendment under section 128 was justified by legislative competence in view of the Entry-55 of the State List-II of the Seventh Schedule to the Constitution of India. The U.P. Municipal Corporation Rules were framed under U.P. Municipal Corporation Act which provided for the procedure for levy and collection of the Advertisement Tax. The said rules came up for consideration before the Full Bench in the case of Anurag Bansal vs. State of U.P. And Others, which was decided on 24.4.2011 wherein the said rules were held to be ultra vires, the provision of the Act as same were made without following the procedure laid down under the Act. In a similar manner, bye-laws framed by the Nagar Nigam, Lucknow, Nagar Nigam, Allahabad and Nagar Nigam, Bareilly were challenged and were declared as illegal, void and inoperative vide judgement of
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inserted and which provides for levy and collection of Goods and Services Tax and by virtue of the said amendment in the Constitution Entry-55 of the List-II which provided for taxes or advertisement has been omitted with effect from 16.9.2016. In pursuance of the 101 Amendment U.P. Goods and Service Tax 2017 (Act No. 1 of 2017) came into operation with effect from 01.7.2017.
Section 17 of the 101 Constitutional Amendment Act is quoted as under:
17. Amendment of Seventh Schedule – In the Seventh Schedule to the Constitution,-
(a) in List I – Union List,-
(i) for entry 84, the following entry shall be substituted, namely:-
“84. Duties of excise on the following goods manufactured or produced in India, namely:-
(a)petroleum crude;
(b) high speed diesel;
(c) motor spirit (commonly known as petrol);
(d) natural gas;
(e) aviation turbine fuel; and
(f) tobacco and tobacco products.”;
(ii) entries 92 and 92C shall be omitted;
(b) in List II-State List,-
(i) entry 52
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f certain Acts. – Save as otherwise provided in this Act, on and from the date of commencement of this Act,-
(i) In the Uttar Pradesh Municipal Corporation Act, 1959 Clause (h) of sub-section 2 of Section 172 and Sections 192, 193 shall be omitted.
(ii) In the Uttar Pradesh Municipalities Act, 1916 clause (7) of sub-section (2) of Section 128 shall be omitted.
(iii) In the Uttar Pradesh Taxation and Land revenue Laws Act, 1975, Chapter II shall be omitted.
Admittedly, the bye-laws by virtue of which the municipalities intended to levy and collect tax on advertisement were framed on 12.1.2017, however, the same were published on 19.8.2017 i.e. after 01.07.2017 when the U.P. Goods and Service Tax Act, 2017 came into being and after the omission of Section 128(2) sub-section (vii) of the U.P. Municipalities Act.
That being the case, the narrow ground to be considered by this Court is whether the bye-laws framed on 12.1.2017 by the respondents and published on 19.8.2017, were beyond t
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173 of the U.P. Goods and Service Tax Act, 2017, the municipality did not even have the statutory competence to levy, impose or collect Advertisement Tax.
In the said view of the matter, the levy and collection of the Advertisement Tax under the provisions of Nagar Palika Parishad, Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 is clearly without legislative or statutory competence and is ultra-vires under Article 265 of the Constitution of India, U.P. Municipalities Act, 1916 and U.P. Goods and Service Tax Act, 2017. This Court has no hesitation in holding that the said Nagar Palika Parishad, Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 is without any legislative or statutory competence and, thus, are hereby struck down.
In view of the fact that the Court has held the levy and collection of Advertisement Tax as ultra-vires, the amounts so collected from the petitioner are liable to be refunded.
Accordingly, the Nagar Palika Parishad
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ity of law.
Therefore, the authority to levy any tax must be derived from some Statute.
The Nagar Palika Parishad, Hathras framed the said byelaws in exercise of its powers under Sub-Section (2)(vii) of the Section 128 of the Municipalities Act which enabled the municipality to impose tax on advertisement not being advertisement published in the news papers.
The aforesaid provision of Sub-Section (2)(vii) of the Section 128 of the Municipalities Act was omitted vide Section 173 of the G.S.T. Act which was enforced w.e.f. 01.07.2017. It may be pertinent to note that not only the G.S.T. Act was implemented w.e.f. 01.07.2017 but even the provision of Section 173 thereof was enforced with effect from the said date. Thus, Section 128(2)(vii) of the Municipalities Act stood omitted w.e.f. 01.07.2017.
In view of the aforesaid omission of Section 128(2)(vii) of the Municipalities Act by the G.S.T. Act, all municipalities in the State of U.P. were denuded of the power to impose tax on adver
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framing of bye-laws is not enough unless they see the light of the day which they saw for the first time on publication in the gazette by which time power to impose tax on advertisement was withdrawn.
Apart from the above, the State legislature was invested with the power to make laws in respect of taxes on advertisement vide Entry 55 of List II to the 7th Schedule of the Constitution but the said Entry was deleted by the Constitution (101st Amendment) Act, 2016 w.e.f. 12.09.2016. The said Amending Act vide Section 17 amends 7th Schedule and provides for the omission of Entry 55 of List 2 of the said Schedule. Thus, deleting the power of the State to make laws in respect of taxes on advertisement.
Accordingly, when the State was denuded of the power to make laws in respect of tax on advertisement obviously the municipalities also were divested of power to impose any tax on advertisement.
In view of the aforesaid, the impugned bye-laws are also ultra vires to Article 265 and List II
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M/s Chavan Autowheels Pvt. Ltd., M/s Chavan Motor Div. (I), Pvt. Ltd. Versus The State of Maharashtra and Ors.
GST
2019 (2) TMI 427 – BOMBAY HIGH COURT – TMI
BOMBAY HIGH COURT – HC
Dated:- 8-2-2019
WRIT PETITION NO. 713 OF 2019 WITH WRIT PETITION NO. 716 OF 2019
GST
S.C. DHARMADHIKARI & M.S. KARNIK, JJ.
Mr. Chandrakant B. Thakar for the Petitioner.
Mr. Pradeep S. Jetly a/w Mr. Jitendra B. Mishra for respondent Nos.3 to 6.
Ms. S.D. Vyas, 'B' Panel Counsel for State- Respondent Nos.1, 2 and 7.
P.C. :
1 After this matter was heard for some time, firstly our attention was invited by Mr. Jetly appearing for respondent Nos.3 to 6 at page 41 of the memo of writ petition No.713 of 2019 and at page 47 of the memo of
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.2018 issued by CBIC.
Accordingly, you may file your IT related grievance through field officer or nodal officer of your jurisdiction, for consideration of your grievance by IT-Grievance Redressal Committee.
Hence your letter dated 19.10.2018 is returned herewith, in original.
(Arjun Kumar Meena)
Deputy Commissioner to GST Council
Encl : As above.
3. Then, Mr. Jetly says that this is possibly not a grievance against the Central machinery, but the State GST Officials.
4. In that regard, we find that respondent No.2 to these petitions is the Commissioner of State Tax.
5. On an oral query, Ms. Shruti Vyas appearing for respondent Nos.1,2 and 7 took instructions from the official present in the Court and says that respondent Nos.1, 2 an
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PERFECT BORING PRIVATE LIMITED Versus UNION OF INDIA
GST
2019 (2) TMI 741 – GUJARAT HIGH COURT – 2019 (22) G. S. T. L. 6 (Guj.)
GUJARAT HIGH COURT – HC
Dated:- 8-2-2019
R/SPECIAL CIVIL APPLICATION NO. 1321 of 2019
GST
MS HARSHA DEVANI AND DR A. P. THAKER, JJ.
For The Petitioner (s) : MR ZUBIN F BHARDA (159)
For The Respondent (s) : MR ANKIT SHAH (6371)
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. Rule. Mr. Ankit Shah, learned senior standing counsel waives service of notice of rule on behalf of the respondents.
2. Having regard to the controversy involved in the present petition, which lies in a very narrow compass, with the consent of the learned advocates for the respective parties, the same was taken up for hearing.
3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the order of provisional attachment dated 15.5.2018 passed by the respondent No.2 in exercise of powers under section 83 of th
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s. 90,30,711, the petitioner has deposited Rs. 90,62,495/-. It was further submitted that for the month of October, the petitioner has paid Rs. 18,24,000/- towards GST dues. It was further submitted that out of the outstanding excise dues of Rs. 1,05,27,185/-, the petitioner has cleared Rs. 49,51,000/- from April 2018 till date and has been continuously paying the outstanding central excise dues. It was submitted that in spite of various hardships suffered by the petitioner, the petitioner has been regularly paying the central excise dues. The petitioner has, therefore, requested the respondents to permit the petitioner to pay the central excise dues in installments; however, there is no response thereto. It was submitted that as the respondents have attached the bank accounts maintained by the petitioner, the petitioner is not able to deposit the employees' provident fund as required to be deposited with the office of Employees Provident Fund Organisation in respect of which a sho
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of the Government revenue and that the second respondent is duly empowered under section 83 of the CGST Act to pass such order. It was submitted that insofar as granting of installments under Circular No.996/3/2015-CX dated 28.2.2015 is concerned, since the petitioner is a habitual defaulter, it is not entitled to the benefit of the said circular. It was further pointed out that the petitioner is permitted to operate the bank accounts insofar as payment towards GST, excise, service tax liability is concerned. It was further submitted that the petitioner had vide letter dated 29.5.2018 committed to pay Rs. 25,00,000/- every month towards the central excise liability; however despite giving assurance, the petitioner had failed to do so and, therefore, the attachment over the bank accounts of the petitioner could not be lifted. It was, accordingly, urged that the respondent having exercised powers under section 83 of the CGST Act in accordance with law, there is no warrant for interventi
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ght of the facts and circumstances noted hereinabove and the rival contentions advanced by the learned advocates for the respective parties, the court is of the view that the interest of justice would be served if the petitioner is permitted to pay the amount of Rs. 55,00,000/- outstanding towards excise dues by way of equal monthly installments within a period of eight months, subject to the petitioner furnishing a bank guarantee for an equal amount towards security of such amount within a period of one month from today.
8. In the light of the above, the petition partly succeeds and is, accordingly, allowed to the following extent:
The respondents are directed to forthwith release the attachment over the following bank accounts of the petitioner:-
Sr.
No.
Bank
Branch
Account No.
Type
1
Bank of India
Main Branch, Bhadra, Ahmedabad
200030100170219
Cash Credit
2.
Bank of India
Main Branch, Bhadra, Ahmedabad
200020110000901
Current
3.
Bank of Baroda
Vatva I.E.
15
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Shriram Life Insurance Company Versus CC, CE & ST, Hyderabad –IV and CC, CE & ST, Rangareddy –GST (Vice-Versa)
Service Tax
2019 (2) TMI 868 – CESTAT HYDERABAD – [2019] 69 G S.T.R. 295W (CESTAT – Hyd), 2019 (31) G. S. T. L. 442 (Tri. – Hyd.)
CESTAT HYDERABAD – AT
Dated:- 8-2-2019
Appeals No. ST/30263, 30327/2016 & ST/30141/2017 – FINAL ORDER No. A/30187-30189/2019
Service Tax
Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) and Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL)
Shri Vishal Aggarwal, Advocate for the Appellant.
Shri Arun Kumar, Joint Commissioner (AR) for the Respondent.
ORDER
These three appeals are filed against very same Order-in-Original hence being disposed of by a common order.
2. Appeal No. ST/30141/2017 is filed against Order-in- Original No. 004/Com-39-16-17 dated 14.10.2016 by Shriram Life Insurance Company (herein after referred to as appellant assessee) while appeal No. ST/30263/2016 is filed against Order-in-Original No. 004/COM/55-15-16 dated 1
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e insurer will not pay anything while in the case of endowment policy the insurer will pay out the sum assured under the policy along with all benefits that have accrued till date upon the death of the policy holder within the policy term or expiry of the policy term. While in the case of Unit Linked Insurance Plans (ULIP), allows the policy holders to direct part of their premium into investment in different types of funds wherein, a part of the investment goes towards providing life cover, while the residual portion of the ULIP is invested in a fund which in turn invests in stocks/bonds/ various investment instruments. It is not in dispute that appellant assessee is covered under the life insurance services. As per the policy of the appellant assessee, and insurer or policy holder is eligible to surrender /discontinuance charges, on pre-mature termination of the policy in which case appellant assessee reduces a sum as surrendered/discontinuance charges which the Revenue is seeking to
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st that part of the order which held in favour of the appellant assessee on the part of the premium recovered towards management and fund under ULIP which was attributable to premium allocation charges, policy administration charges etc., which did not fund a part of the taxable value of service under ULIP and consequently, assessee was required to comply with the provisions of Rule 6 of the CENVAT Credit Rules, 2004 or otherwise and the Adjudicating Authority has held that compliance with the provisions of Rule 6(3) (ii) is enough and there is no need for demand under Rule 6(3) of the CENVAT Credit Rules, 2004.
5. Heard both sides and perused the records.
6. Learned Counsel appearing for the appellant assessee submits as under:
a) regarding tax on surrender charges:
i) Option to terminate the surrender insurance policy and recover insurance money is an actionable claim has held by Apex Court in it is judgment in the case of Union of India Vs. Sri Sarada Mills Ltd., [1972 (2) SCC 8
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ns, 2010 to contended that surrender/discontinuance charges consideration for life insurance service that had been rendered in as much as the regulation specifically stated that the said charges were to be recovered only to recoup the expenses already incurred towards procurement, administration of the policy and incidental thereto and encourage policyholder to continue with the contract for the full term, to ensure the charges reflect the actual expenses incurred. All that the said regulation prescribed was the manner in which surrender value was to be arrived at which hitherto, was not provided for the regulation applied only in respect of policies issued after 01.07.2010 and were completely irrelevant insofar policies issued prior to that date so concerned.
v) Demand of service tax has been confirmed by the Adjudicating Authority under the head of Life Insurance Services taxable under Section 65(105) (zx) whereas the show cause notice has proposed to recovery of service tax in resp
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h cash and by utilising CENVAT credit. It is his further submission that undisputedly in their financial records appellant assessee had made appropriate entries towards the tax liability in cash as also by debiting the CENVAT account. It is the submission that it was only due to an error/omission while filing CENVAT returns (in form ST-3) the credit utilisation towards payment of tax for the month of June was understated by the amount. This error was corrected in the year April, 2013.
C) regarding demand of service tax of Rs. 8,17,779/-
It is his submission that neither notice nor the impugned order has suit out any head of taxable service under which the tax in respect of said amount was being demanded. It is settled law that without specifying the head of taxable service under which the demand is being raised, tax cannot be recovered.
D) regarding reversal of tax as required under Rule 6 as sought in the Revenue's appeal.
It is his submission that the appellant was not recovered
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26.6 to 26.14. on the issue of what would surrender would means. After reading the findings recorded by the adjudicating authority, it is his submission that surrender value of the policy means termination of the contract in its entirety at the instance of the policy holder, the consequence of such action is specified by the appellant assessee in their brochures/ documents such as policy conditions and privileges. It is the submission that by accepting the surrender of the policy by the insurer, it is the service rendered by the appellant assessee. It is his further submission that the Adjudicating Authority has erred in traversing beyond the remand order dated 15.05.2014 passed in the earlier grounds in the proceedings wherein, it was admitted by the appellant that they are liable to pay interest were excess utilisation and also liable to reverse CENVAT credit under proportionate basis for the period 01.07.2010 to 30.04.2011.
9. On careful consideration of submissions made by both si
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1938, even though, the amount may not be a liability which is immediately payable, the difference between the fund value as on the date of surrender vis-a-vis the amount paid as surrender value, is accounted as surrender charges in the books of account.
10. The issue which falls for consideration is whether the exercise of the right of the insurer to receive money is merely a transaction in actionable claim, so as to be out of the purview of service tax. The provisions of Finance Act, 1994 more specifically Section 65B(44) defines what would mean the service which we reproduce:
“service” means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,-
(i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner;
or
(ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of arti
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emed as an employee before the commencement of this section.
'Explanation 2. – For the purposes of this clause, the expression “transaction in money or actionable claim” shall not include –
(i) any activity relating to use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
(ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out –
(a) by a lottery distributor or selling agent on behalf of the State Government, in relation to promotion, marketing, organising, selling of lottery or facilitating in 7 organising lottery of any kind, in any other manner, in accordance with the provisions of the Lotteries (Regulation) Act, 1998;. (Finance Act 2016)
(b) by a foreman of chit fund for conducting or organising a chit in any manner.;
Expl
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by mortgage of immovable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in possession either actual or constructive, of the claimant, which the civil courts recognise as affording grounds of relief whether such debt or beneficial interest be existent, accruing or conditional or contingent”.
It can be seen that actionable claim as defined under Transfer of Property Act means a claim to any debt, secured by any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant. From the definition of actionable claim, the insurance policy or the surrender value thereof would become an actionable claim or otherwise was a matter of dispute in the Apex Court in the case of Union of India Vs. Sri Sarada Mills Ltd., (supra) wherein, it has been explained that right to receive insurance money is an actionable claim. The relevant portion of Apex Court observations are reproduced as
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or a partner's right to sue for an account of a dissolved partnership or the right to claim the benefit of a contract not coupled with any liability (see Union of India Vs. Sri Sarada Mills Ltd., SCC at P. 880)”
11. In fact, Hon'ble High Court of Bombay in the case of Insure Policy Plus Services Pvt. Ltd., Vs. LIC of India as reported at [2007 (109) BOMLR 559] held that life insurance policy is a actionable claim within the meaning of Section 3 of the Transfer of Property Act. The relevant portion of the ratio is in paragraph No. 7 which we reproduce:
” 7. A long time ago Romilly, M.R., in (Strokes Vs. Cowan)1, (1860) 30 L.J. Ch.882, observed that “Policies of insurance” “must be considered to be securities for money.” The amount payable under a policy of insurance is a debt due from the insurer to the insured on the happening of a certain event or the lapse of a certain time, and the policy is the security for such debts charged upon the property or the stocks or funds of the insure
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contracts by which the policy holder has a right to recover certain sums of money from the insurance office in certain events, and the premium which he pays may be considered as an investment so as to obtain for him a benefit of the policy holder.” Life policies are now construed not as contracts of indemnity but to pay a certain sum in a certain event depending on the duration of human life.”
The judgment of the Hon'ble High Court of Bombay in the case of Insure Policy Plus Services Pvt. Limited was affirmed by Apex Court as reported at [2016 (2) SCC 507]. In our view, the judgments and the ratio thereto clearly supports the contention of the appellant that life insurance policy / the right to receive insurance policy money is an actionable claim. The exercise of the right to receive insurance money by the insured is an activity which is a transaction in actionable claim and is outside the scope of the definition of service. In our view, the amounts entered as surrender/discontinuan
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e heads of service even for the period prior to 01.07.2012. It is to be noted coordinate bench has already taken a view no service tax has been payable on the amounts retained by the surrender/discontinuance in the period prior to 01.07.2012 in the case of Reliance Company Limited Vs. CCE reported at [2018-TIOL-1308-CESTAT-Mumbai] wherein, the bench considered all aspects of the issue and came to a conclusion that the amount is not taxable and are not part of taxable services rather it is in the nature of penalty or liquidated damages which is not a service hence cannot be made liable for tax during the period involved. The said observation of the bench would cover the issue in the case in hand, even after 01.07.2012 as has been recorded by us herein before.
13. We are unable to agree with the Adjudicating Authority that the amounts recorded as surrender/discontinuance charges are consideration for services rendered and such charges are designed to recoup the expenses already incurred
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e tax on the surrender charges for the period in question is unsustainable accordingly is set aside so also the interest and the penalty imposable.
15. As regards the levy of interest on the amount of Rs. 91,92,096/-, allegedly short paid for the month of June, 2012 is concerned, after going through the ST-3 returns records for the period April to June 2012 as also subsequent periods we find that there is an omission/error in the CENVAT portion of the return. It is noticed that assessee had in fact indicated in those returns the correct tax liability and discharge of the same by payment in case debit in CENVAT balance. There is no dispute that the said ST-3 returns discharge of the entire liability was payable by cash has been paid. That portion of the amount of the discharge of tax liability, indicated in the returns has been paid by utilisation of CENVAT credit, we find that the CENVAT portion registered in the ST-3 do not indicate any debit of the said amount. It is also on records
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he appellant assessee. To that extent we hold that the appellant assesse's appeal does not merit acceptance.
16. In view of the foregoing, on this point, we hold that the appellant assesee needs to discharge the interest liability on the said amount, but at the same time we hold that there is no necessity to visit the appellant with any penalty on this point.
17. In so far as the service tax demand of Rs. 8,17,779/-, we find that the demand for the period needs to be upheld as appellant assessee is not able to show from the records that they had indicated the amount as other income in the service tax returns. Accordingly, we find the arguments put forth by the Learned Counsel on this point do not merit any acceptance and we uphold the confirmation of demand of Rs. 8,17,779/- along with interest. We set aside the penalties imposed on them on this count also.
18. In so far as the appeal filed by the Revenue is concerned, show cause notice issued to the appellant assessee has alleged t
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traverse beyond the scope of the remand order dated 15.05.2014 of the Tribunal more specifically in paragraph No. 12 & 13 which held that for the period from October, 2006 to March 2008 interest was leviable on restriction of utilisation of CENVAT credit under Rule 6 and for the period 01.07.2010 to 31.03.2011 tax under Rule 6 was leviable on proportionate basis in terms of Rule 6(3) (ii) of CENVAT Credit Rules, 2004.
19. We have perused our order dated 15.05.2014 and find that the same disposed of the appeal filed by the appellant assessee at the stay stage itself by directing appellant assessee to make a pre-deposit of Rs. 1 crore based on prima facie observations in paragraph No. 12 & 13. In fact, in paragraph 15 it was categorically held that the matter was being remanded to the Adjudicating Authority with request to re-adjudicate the matter afresh and pass a reasoned detailed order covering all the issues and dealing with all the submissions that may be made by the assessee and
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er charges, funds administration charges are only to be excluded and therefore exclusion of such value and such excluded value cannot be considered as attributable to exempted services. However, he fairly agrees that this issue had been considered by this Tribunal in the case of ING Vysya Life Insurance Co. Ltd., Vs. CCE, C & ST, Bangalore [Misc. Order No. 2088-20882/2014 dt. 01/04/2014, and we had taken a prima facie view in favour of the Revenue. However in view of the fact that the issue as to whether the portion of such leviable amount can be considered as exempted service or not is a debatable issue and therefore the appellant could not be found fault with if they had not opted to pay proportionate credit attributable to such value. This Tribunal in the case of ING Vysya had allowed such option to be exercised now and accordingly took a view that appellant should reverse the proportionate credit attributable to such values. The learned counsel submits that according to their own c
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ant deposits an amount of Rs. 1 crore (Rupees one crore only) within eight weeks and report compliance to him. Needless to say that the appellants shall be given reasonable opportunity to present their case before the matter is adjudicated.”
20. We are unable to understand why the Revenue is contesting that the Adjudicating Authority was not required to decide on the applicability of Rule 6 of the CENVAT Credit Rules, to the facts of the present case. In our view Revenue has not challenged the findings of the Adjudicating Authority on merits qua the applicability of Rule 6, on this count itself, the appeal filed by the Revenue deserves to be dismissed. However, as both sides had made extensive arguments with respect to the no exempt service being rendered by the assessee, we proceed to record of our findings on the same.
21. The primary contention of the assessee is that undisputedly as per notice the charges towards policy administration, premium allocation and surrender charges are
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DELHI INTERNATIONAL AIRPORT LIMITED Versus CGST-DELHI
Service Tax
2019 (2) TMI 869 – CESTAT NEW DELHI – 2019 (24) G. S. T. L. 403 (Tri. – Del.)
CESTAT NEW DELHI – AT
Dated:- 8-2-2019
Appeal No. ST/52332/2016-CUS [DB] – FINAL ORDER NO. 50213/2019
Service Tax
Shri Anil Choudhary, Member (Judicial) And Shri C.L. Mahar, Member (Technical)
Shri Somesh Arora, A.S. Hasija, Advocate for the Appellants
Shri Amresh Jain, AR for the Respondent
ORDER
Per Anil Choudhary:
The appeal is directed against Order-in-Original No.10/2016-ST dated 29.04.2016 issued vide F.No.DZU/Adj/DIAL/12/2015/3750 dated 02.05.2016 passed by Additional Director General, Directorate General of Central Excise Intelligence, New Delhi-110066.
2. The facts leading to the issuance of the impugned order briefly are that M/s Delhi International Airport (P) Ltd, New Udaan Bhawan, Opp. Terminal-3, IGI Airport, New Delhi-110037 (hereinafter referred to as DIAL) in pursuance of privatization process of
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n the master plan norms of the competent local authority of Delhi, (as the same may change from time to time) of the total land area constituting the Demised Premises. Provided however that the Non-Transfer Assets, if any, that form part of the Carved-Out Assets and/ or situated upon the Existing Leases shall be taken into account while calculating the percentage of total land area utilized for provision of Non-Transfer Assets.”
Same was to be on 30 years lease extendable at the consent of both the parties.
3. Appellant DIAL under the OMD Agreement, also had at its disposal vacant land situated at the Hospitality District termed 'Aero City'. For development of these areas DIAL entered into two agreements one- termed as 'Development Agreement', one such detailed agreement with 'Silver Resort Hotel India Pvt. Ltd' (SRHIPL) entered into on 26.02.2010 has been submitted with the appeal memo and the other termed as 'Infrastructure Development and Service Agreement' (IDSA) and one such de
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35.75
25.2.2010
25.2.2010
9
1.71
190,000
InterGlobe Hotels
nterGlobe Hotels
20.90
3.6.2009
3.6.2009
10
1.6
175,000
Bird Group
Bird Group
19.25
28.5.2009
28.5.2009
11
3.1
450,000
Bhati Realty
Aspen Buildtech
20.35
29.5.2009
29.5.2009
12
1.6
185,000
Wave Impex
Wave Hospitality
20.35
29.5.2009
29.5.2009
13
7.7
1,200,000
DB Hospitality
DB Hospitality
132.00
11.11.2009
11.9.2009
Total
45.09
6,120,000
653.13
The area wise details of each developer with whom agreements were entered and Allocated 'Advance development cost' (ADC) or 'total infra deposit' received are also given in the above table.
As per Article 3 of the Agreement the 'Advance development cost' was allocated to various successful bidders by allocating and working out the same on the basis of Rs. 1,100/- per Sq Ft. of maximum gross built up area.
The said Article 3 reads as below:-
“3.1 Advance Developmen
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Article 6.4 hereof, the Parties agree that any portion of Advance Development Cost paid by the Developer to DIAL, as has not been utilized by DIAL towards development of any infrastructure Facilities during the course of the Initial Term, as certified by the internal auditors of DIAL, shall be returned to the Developer upon the earlier of the expiry of the Initial Term or upon termination of Development Agreement in accordance with the terms thereof.
1.1.5 The Parties recognize and agree that nothing contained in this Agreement shall confer any title or ownership rights in respect of the Infrastructure Facilities on the Developer and any revenues accruing therefrom shall be solely to DIAL's account.
4. The total airport site area covered under OMDA with Airport Authority of India dtd. 04.04.2006 was 5000 acres, out of which 62.5 acres was allowed to be developed as “Hospitality District” for commercial development, out of which 45 acres were earmarked as asset area and leased out
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e facilities and were to be maintained by the appellant under 'IDSA Agreement'. In relation to these infrastructure development facilities, the IDSA agreement provided that DIAL shall be responsible to provide in Asset Area-3, following common infrastructure facilities, upon receipt of advance towards development cost, from the Developer, and payment of maintenance charges:
(i) power supply at 11KW to Developer in Asset Area-3, thereafter Developer shall be responsible for internal distribution.
(ii) water infrastructure and supply at Asset Area-3 at a single location,
(iii) Road Network, including peripheral roads, however Developers shall be responsible for development of all internal roads within Asset Area-3
(iv) Fire Fighting, DIAL to be responsible for common storage tank external fire ring main and Hydrants at common area of Asset Area-3. Developer to be responsible for internal storage tanks and installation of fire detection and fighting system within Asset Area-3.
(v) St
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enting of Immovable Property Services' This, as per the department, was clarified to the appellant on 02/03.05.2012 vide C.No.IV(16)HQ/Tech/ST/179/2011, in response to clarification sought by M/s Aria Hotels & Consultancy Services Pvt. Ltd., which was one of the parties to such agreements with the appellant. Even though the letter itself mentioned that the issue is being referred to the Board for confirmation of views, but still the Ld. Commissioner has referred it as the final view of the Department in the impugned order. However, w.e.f. 01.07.2010 appellant discharged tax liability on License Fees received by them under Development Agreement with Silver Resort Hotel India Pvt. Ltd. (SRHIPL) entered into on 26.02.2010. Similarly the appellant has discharged tax liability on License Fees received by them under Development Agreement with other parties also. This issue is not in dispute. Prior to this on 09.07.2007 appellant had sought an opinion from M/s PWC, which had opined that no se
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„license of land acquisition of development right, there is exposure of service tax or VAT to such transaction as explained below:-
Service Tax;
As per service tax law there is no service tax on the right to use of land. Further, in the Budget 2007 a new taxable category of 'renting of immovable property' has been inserted which excludes 'vacant land' from its ambit. Therefore the activity of licensing of land by DAPL, to licensee would not be chargeable to service tax. Also, the activity of grant of development right is not covered under any taxable category of service.
B. Whether advance received by DAPL from licensees towards development of basic common infrastructure facilities is taxable to service tax under service tax regulations?
Given the background that the licensee would pay the advance to DAPL for development of common infrastructure facilities, such as roads, power, water and other infrastructure facilities which DAPL is obliged to develop in terms of its Dev
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t in the nature of building/ part of building. Accordingly, since the facilities being provided do not fall under the definition of immovable property, no service tax implication would arise under this category. Further, these services cover renting, leasing, letting out of immovable property. Renting, leasing, letting out of facilities is an arrangement wherein an exclusive right is granted for the immovable property, whereas in this case the various sub-licensees would be using these common facilities and there would be no exclusive right to anybody. Since these services are neither for renting, leasing or letting out in relation to an immovable property, they would not attract any service tax under the category of Renting of Immovable Property.
2. Business Support Services; As per the definition of support service under the service tax law, this category covers the services provided for effective administration of an organization. It specifically includes service of provision of i
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rport. For this purpose it is required to be examined whether the common facilities are located inside the airport.
The airport has not been directly defined under the service tax provisions. It is taken to have the sme meaning as is assigned to it by the Airport Authority Act, 1994, which while defining the term 'airport' uses the terms 'aerodrome' and 'aircraft' as defined in Aircraft Act, 1934. Following are the relevant definitions:-
'Airport' has the meaning assigned to it in clause(b) of Section 2 of the Airport Authority of India Act,1994 (Section 65 (3c) of the Finance Act, 1994)
.
'Airport' means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of Section 2 of the Aircraft Act, 1934. (Clause (b) of Section 2 of the Airport Authority of India Act, 1994).
'Aerodrome' means any definite or limited ground or water area intended to be used, either wholly or i
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ssed above. Accordingly, the applicability of the category of airport service to the instant transaction can be ruled out.
Based on the above discussion, it may be seen that the advance received by DAPL from the licensees for development of common facilities by DAPL, does not sell under any of the taxable service category, therefore, there is no service tax exposure on the instant transaction.
C. Whether refundable deposits received by DAPL from the licensees for overall development of infrastructure facilities are liable for service tax?
The refundable deposits received by DAPL for overall development of infrastructure facilities would not attract service tax liabilities as the basic activity of such development would not attract service tax as per the above discussion.
6. The Office of Commissioner Service Tax, vide letter dated 16.05.2011 in response to inquiry made by M/s Aria, opined that Service Tax was payable on License Fees, for Development Right for the purpose of hot
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nting of immovable property services. However, the matter has been referred to Board Office for confirmation. But, no confirmation from Board was received by the Appellants. It is claimed by the appellant that the Development Agreement was duly enclosed by M/s Aria Hotels, while seeking clarification from Chairman CBEC, vide letter dated 11.07.2011. Similarly, letter dated 17.07.2012 to Commissioner, Service Tax clearly indicates that Development Agreement dated 04.07.2009 was duly enclosed. Even the notes to clauses of the Development Agreement, in Notes to Clauses No.1.1.39 clearly refers to and defines „Infrastructure Development and Services Agreement', even Para 6.1.2 also has a clear reference to 'Infrastructure Development and Services Agreement'. The relevant portion of the said Para 6.1.2 is extracted below:-
“Provided that the Developer shall, subject to the terms of the 'Infrastructure Development and Service Agreement', be solely responsible to seek connection of, pr
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ter completion of investigations based on facts narrated in preceding paras, Show Cause Notice dated 10.10.2014 was issued by the Additional Director General, DGCEI (Hqrs), New Delhi under F. No 574/CE/41/20/Inv./ Pt.II/11327 dated 10.10.2014. The said Show Cause Notice was adjudicated by the adjudicating authority on contest vide the impugned order wherein demand of Rs. 54,31,68,584/-(Fifty Four Crores Thirty One Lakh Sixty Eight Thousand Five Hundred Eighty Four) was confirmed, interest demanded under Section 75 and penalties under Sections 77 and 78 of Finance Act, 1994 were imposed. Hence the present appeal.
8. Sh Somesh Arora, Advocate, Ms Mehak Gupta and Sh A.S. Hasija, Consultant appeared for the appellant and Sh Amresh Jain, DR, appeared for Revenue.
9. Heard both sides and perused case records, oral and written submissions made and the case laws.
10. The issue before us is whether 'Advance Development Cost' received from Developers towards development of common infrastructu
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omplex or estate, but does not include –
(a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;
(b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land;
(c) land used for educational, sports, circus, entertainment and parking purposes; and
(d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities.
Explanation 2. – For the purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce;
11. We observe that granting of License to the Developer for the Asset Area and Development of Common infrastructure facilities, outside the Asset Area,
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of various services, -both are in relation to real estate which were not part of Asset Area-3 and are related to Common and Public Area with no exclusive right being conferred. Under the OMD Agreement entered between the appellant and AAI, appellants had responsibilities to adhere to various construction norms, civil aviation security norms and norms of master plan of Delhi Government and of other agencies. Therefore, even while allowing development rights to developers in allocated development area, as per norms and approved plans, for common areas, it had to perform supervisory role to develop facilities as per approved plans. Since it was the appellant's responsibility, as a privy to contract under OMD Agreement, to be responsible for operation management and development. In terms of the agreements such common facilities could not have been developed by any developer for everyone including members of public. Therefore, only the appellant was responsible to do the same. It is hard to
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ivities performed prior to amendment of Section 67 w.e.f. May 14, 2015, can not include the value of goods and services, cost of which is only defrayed or reimbursed to the appellant even in advance, in terms of IDSA, The Department has failed to show, if any portion was retained by the Appellant as its remuneration for alleged services provided. Reliance in this regard is placed on 2018 (10) G. S. T. L. 401 (S. C.), in the matter of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. (Para 16, 22, 24, 25 and Para 29). The relevant paras are extracted below;
16. Mr. J.K. Mittal, Advocate, appeared for M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. He argued with emphasis that the impugned judgment of the High Court was perfectly in tune with legal position and did not call for any interference. At the outset, he pointed out that the Parliament has again amended Section 67 of the Act, by the Finance Act, 2015 w.e.f. May 14, 2015. By this amendment, ex
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o be included for computing the service tax”.
22.Section 66 of the Act is the charging Section which reads as under:
“there shall be levy of tax (hereinafter referred to as the service tax) @ 12% of the value of taxable services referred to in sub-clauses of Section 65 and collected in such manner as may be prescribed.”.
24.In this hue, the expression 'such' occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing 'such' taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service, cannot form part of that valuation as that amount is not calculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be
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In the present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended vide Finance Act, 2015, with effect from May 14, 2015, whereby Clause (a) which deals with 'consideration' is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the Learned Counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 a
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ers in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof.
Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6
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Bench (same composition) in the matter of Premium Real Estate Developers, Rajat Yadav Vs. C. S. T. Service Tax, Delhi, Final Order No.53322-53323/2018 dated 30.09.2013, where the issue before the bench was relating to Advance receipt by the Appellants for purchase of land, Development of Land and Registration of land. The Settlement of the Accounts was still to take place and the exact component of consideration of alleged service received was still to be ascertained. The Department was of the view that advance received by the appellant itself was taxable in its hand as per Section 67. Disagreeing with the proposition, and giving relief to the party the bench observed as follows:
'Para 29. We feel that since the specific remuneration has not been fixed in the deal for acquisition of the land we are of the view that both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore we are of the view that taxable value itself has not acquire
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Reliance in this regard is also placed on the decision of this Tribunal Bench- Chennai, in the case of Commr. Of C.Ex. & S.T, Madurai Vs Sashwath Construction Pvt Ltd-2018 (10) GSTL 273 (Tri-Chennai) wherein it was held-
Construction of Residential Complex Service,-Amount received by builder from allottees under category 'easement rights' for using certain common area-Taxability of-Order of authorities below holding amount being relatable to construction and land value, hence not taxable, sustainable especially when Revenue not challenged such finding on merit but only contested that the same is beyond the scope of show cause notice-Amount received for easement rights held not taxable-Section 65 (30)(a) and 65 (105) (zzzh) of the Finance Act, 1994.
14. Development of Common Infrastructure facilities outside Asset Area cannot be construed as 'Renting of Immovable Property' or a service in relation to the renting of immovable property. The treatment of reimbursement of cost, of common
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cannot encompass anything done for development of the common facility/ property. There is difference between anything done in relation to 'renting of immovable property service' and anything done in relation to 'immovable property' per-se, which is in common domain. The latter cannot fall within the ambit of the former,
15. From the definition of Renting of Immovable Property Services as contained in Section 65(105)(zzzz), (reproduced above), it is evident that in order to be covered under renting of immovable property services, the nature of the activity should be that of renting or letting or leasing or licensing or other similar arrangements of immovable property for use in the course or furtherance of business.
A perusal of the definition of the word 'renting' shows, that the transaction should be under any tenancy, lease, license or any other similar agreement arrangement, whereby an immovable property is given for use to the service recipient. It would be worthwhile to conside
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nsferee who accepts the transfer on such terms.”
Section 52 of the Indian Easement Act, 1882 reads;
“License Defined-Where one person grants to another, or to a definite number of other persons a right to do, in or upon the immovable property of the grantor, something which would, in the absence of which, be unlawful and such right does not amount to an easement or an interest in the property, the right is called license”
Section 105 of Transfer of Property Act,1882 defines a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is therefore a transfer of interest in the immovable property. The transfer of interest is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease and it follows from it that the lessee gets that right to the e
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perty by way of tenancy, lease, license etc. It also includes any other arrangement of similar nature. In order to understand the scope of 'any other arrangement of similar nature' the rule of ejusdem generis is to be applied. A lucid illustration from Salmond on Jurisprudence Twelfth Edition, page 135, is extracted with advantage;
“This (i.e the rule of ejusdem generis) however, is only the application of a common sense rule of language. If a man tells his wife to go out and buy butter, milk, eggs and anything else she needs, he will not normally be understood to include in the term 'anything else she needs' a new hat or an item of furniture”
The words used together should be understood as deriving colour and sense from each other. The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristics and constitute a genus) is required to be determined. By the application of this r
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fixed periodical return. It cannot encompass Development and Maintenance of common facilities, which was to be defrayed on the basis of actual expense incurred. Again lease involves transfer of rights by transferor to the transferee. In this case, there is no right vested in immovable property to be transferred to Developer, again for License a right is required to be conferred to do or continue to do something upon the immovable property of the granter. In this case however, the common area is meant for public use and such immovable property is neither the property of DIAL nor the developer. The road network, metro facilities, etc. are for the general/common use of public and confer any rights, neither on DIAL nor on any Developers. Advance Development Cost is not consideration for any services rendered. In this regard a fine distinction has been drawn by this Tribunal, „As to what amounts to Services having connection with the Renting of Immovable Property and the services whi
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a) the charges collected to undertake various municipal functions like Fire Services, Public amenities, public conveniences including street lightings, parking light, were in the nature of services to be provided by the municipalities and were liable to tax under Management Maintenance and Repair Services in respect of charges collected from allottees., even when within specified industrial area and not outside, it was regarded not as 'Renting of Immovable Property Service,' but as 'Management Maintenance and Repair Services'. Therefore, by no sense of imagination, the Common Area Services outside 'Asset Area' can be regarded as Renting of Immovable Property Services.
Reliance in this regard is also placed on the matter of RICO LTD. VS. COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I-2018 (10) G. S. T. L. 92 (Tri. Del):
17. We find that there is no Service Provider-Service Recipient relationship between the appellant and the Developers, as regards the Advance development cost, because comm
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to renting of immoveable property. Development of common infra outside asset area cannot be said to be in relation to renting of immoveable property, as no interest in common area is transferred under IDSA to developer. In fact the services which can be in relation to renting of immoveable property are in the nature of broker services etc., and not infrastructure facilities which become part of immoveable property in common areas. In fact Section 65(105)(zzzz) explanation 1 sub clause 4 includes within the ambit of immoveable property, only such common areas and facilities which are within complex of such estates. The area outside and common facilities outside such area, are certainly not included. Advance development cost is not consideration for any services rendered, therefore, Section 67 has been improperly invoked to take gross value as consideration for alleged services provided, even when whole of the deposit is liable to be spent and nothing retained as per the IDSA agreement.
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surance Co. Ltd. vs. CCE, Pune.
19. In any case the development of land or common facilities for commercial exploitation and usage by public cannot be termed as Renting of Immovable Property as it is the case of Land Development. Reliance in this regard is placed on 2015 (37) STR 859 (Tri. Del.) as confirmed in 2015 (040) STR J132 (S. C.) in the matter of Alokik Township Corporation Vs. Commissioner of Central Excise and Service Tax, Jaipur-I. (Para 7 and 7.1) :- In which matter construction of sewerage line, laying of underground water supply pipe line or of overhead water tank, construction of dividers and footpath along with plantation were clearly held as activities relating to land development. Number of activities performed in the instant case in relation to land like levelling of land and preliminarily development, boundary wall, construction of road as per norms, landscape garden, construction laying of open and underground drainage, water management, footpaths, construction
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present case and the demand, if any, is time barred. We find that there is nothing brought out on record that the appellant had any intent to evade payment of Service Tax on the consideration paid by the Developers for renting, as alleged. In fact the Appellant had paid Service Tax on the consideration being Licence Fees. There appears no suppression as everything was revealed and was available on Balance Sheet submitted to the Department during Audit conducted from July, 2012 to 2013 and also the same were reflected in ST-3 Returns. It is clear that the appellant nurtured a bonafide belief and it involves interpretation The Department was also not clear on the matter, as is clear from various correspondences discussed in the preceding paras.. Reliance in this regard is placed on: 2016 (42) STR 634 (Cal.): in the matter of Simplex Infrastructure Ltd. Vs. Commissioner Service Tax, Kolkata-Extended period not applicable- when assessee is diligent in responding to all notices issued by t
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pinion was not final. On 18.11.2011 an Assistant Commissioner after visiting the site gave the opinion that tax was dischargeable as renting of immovable property. Again on 08.02.2012 an Assistant Commissioner opined that 'Licence Fee is taxable as Airport Service'. Lastly on 02.05.2012 Deputy Commissioner of Service Tax on re-examination gave opinion that the alleged service is taxable as renting of immovable property but at the same time the matter has been referred to the Board Office. Till date no clarification from the Board has been received. It is thus clear that the matter involved both physical verification as well as examination of legal issue on which even within the Department different sets of opinion existed. Again, all agreements IDSA and Development Agreement were entered from June, 09 to Feb, 2010 i.e prior to date of lease rent of vacant land becoming taxable Renting of vacant land was brought under service tax net w.e.f. 1.07.2010. Therefore, no tenable assertion can
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7 had clearly indicated that the advances received towards Development of basic common infrastructure facilities were not liable to service tax either as 'Renting of Immovable Property Services' as they do not vest any exclusive right in any immovable property in creation of common facilities or 'Business Support Services or 'Airport Services'. Even when 'Renting of Immovable Property w.e.f. 01.07.2010, included vacant land, the opinion has remained relevant because no exclusive right stood vested in creation of common facility.
d. Again as far as non- taxability of Advance Development Cost is concerned, appellant had acted on legal opinion given by PWC which had clearly opined in 2007 that since what has been developed was infrastructure for common facilities and no exclusive rights has been vested in one or any developer. Therefore, such ADC was not taxable as renting of immoveable property. The reasoning given by the PWC in its opinion dt.09.07.2007 continues to be valid even after
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Extension of the due date for furnishing Form GSTR-7 for the month of January, 2019 till 28/02/2019
08/2019 – State Tax Dated:- 8-2-2019 West Bengal SGST
GST – States
West Bengal SGST
West Bengal SGST
GOVERNMENT OF WEST BENGAL
DIRECTORATE OF COMMERCIAL TAXES
14, BELIAGHATA ROAD, KOLKATA -700015
NOTIFICATION BY THE COMMISSIONER OF STATE TAX
Notification No. 02/2019-C.T./GST
Dated: 08/02/2019
No. 08/2019 – State Tax
In exercise of the powers conferred by sub-section (6) of
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M/s Raj Chakraborty Productions. Versus Commissioner of CGST, Kolkata (South)
Service Tax
2019 (3) TMI 305 – CESTAT KOLKATA – 2019 (25) G. S. T. L. 286 (Tri. – Kolkata)
CESTAT KOLKATA – AT
Dated:- 8-2-2019
MA (COD)-77826/2018 And Appeal No. ST/79595/2018 – MO/75096/2019 & FO/A/75195/2019
Service Tax
SHRI P. K. CHOUDHARY, MEMBER (JUDICIAL)
Shri A. Sen, & Shri S. Mondal, & Shri Roshan Sengupta, Advocate for the Appellant (s)
Shri A. K. Biswas, Suptd. (AR) for the Respondent(s)
ORDER
Per Shri P. K. Choudhary:
The appellant filed an application for condonation of delay of 65 days in filing the appeal. The matter was heard at length on 18.01.2019.
2. After hearing both the sides on the application for condonation of delay in filing appeal, I find that the delay has occurred owing to sickness of the Counsel. After considering the submission of both sides, I find that there is sufficient reason for condoning the delay, and I do so.
3. With the consent of both s
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A deals with power of adjudication. The Learned Counsel for the appellant submitted that the order of the Learned Commissioner for withdrawing the facility of payment of outstanding service tax dues in installments as communicated by letter dated 17th July, 2018 has a civil consequence in so far as the recovery of service tax is concerned. It has also submitted that the impugned order had also given an erroneous reason for withdrawal of payments of outstanding demand by installments. He relied upon the following decisions:-
(a) Commissioner of Central Excise Vs Girish B Mishra Order dated 13.02.2013 in Tax Appeal No. 951 of 2012 of the Hon'ble Gujarat High Court.
(b) C. C. E. B. Maharashtra State Bureau (2013) 35 Taxmann Com. 8 (CESTAT).
The Learned A. R. for the Revenue strongly opposed submission of the Leaned Counsel. It is submitted that the Board Circular is an executive order.
6. On perusal of the impugned communication dated 17th July, 2018 of the Learned Commissioner, I fin
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1994. It may be mentioned that Hon'ble Gujrat High Court in the case of Girish B. Mishra (Supra) after considering Section 2(a) of the Central Excise Act, 1944, held that such order is appealable as it has civil consequence affecting rights directly.
7. On merit, the Ld. Advocate for the appellant submitted that by order dated 10th April, 2018 the Ld. Commissioner allowed to pay the outstanding dues in 21 installments for Rs. 3,50,000.00 per month from April 2018 to November 2018 and the balance amount of Rs. 3,25,505/- would be paid by December 2019. It is submitted that there was delay in payment of dues for the month of June 2018 and on 13.07.2018 payment was made for Rs. 7,00,000/- for the months of June 2018 and July 2018. There was no default of payment of installments while passing the impugned Order dated 17th July, 2018.
8. The Ld. Authorized Representative for the Revenue submits that the Board Circular dated 28th February, 2015 clearly stated that in case of default in pay
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dated 17.01.2017 and 04.01.2018 requested the Ld. Commissioner for payment of arrears in installments, which is backed by the Board Circular dated 28.02.2015 being No. 996/3/2015-CX. In the said Circular, the Ld. Commissioner had allowed the payment of the outstanding dues in 21 installments as communicated by letter dated 10th April 2018. By the impugned communication dated 17th July, 2018 It was informed that as the appellant have defaulted in the monthly payments, the Ld. Commissioner has withdrawn the facility for payment of outstanding dues in installments, against which the appellant filed this appeal.
10. In the present case, I find that the appellant failed to pay only one installment for the month of June 2018 within the stipulated period. In fact, the installment for the month of June was paid in the next month on 13.07.2018 alongwith the installment of July 2018. Therefore, the impugned Order dated 17.07.2018 was issued. It seems that the payment of installments of June and
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GST on import of service
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 7-2-2019 Last Reply Date:- 11-2-2019 Goods and Services Tax – GST
Got 2 Replies
GST
XYZ(India) paying consideration to PQR, Germany (Parent company) for providing technical knowledge, designing of product and after sale service in relation to products manufactured by XYZ in India. The amount payable to PQR would depend on sales value of goods sold by XYZ. Is XYZ liable to pay GST on the amount paid to P
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GST on engineering services
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 7-2-2019 Last Reply Date:- 8-2-2019 Goods and Services Tax – GST
Got 1 Reply
GST
XYZ(India) providing engineering service (Design, drawing etc) to PQR, Germany (Parent company). Services are provided online from India. Invoice would be raised by XYZ on hourly basis and rate. Is XYZ liable to pay GST on the amount received from PQR?
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
Please ascertain the
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GST Unifies India's Tax System: Simplifies Structure, Boosts Compliance, and Increases Revenue with Ongoing Updates and Amendments.
News
GST
GOODS AND SERVICE TAX CONCEPT & STATUS – AS ON 1st
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Notice u/s 70 of CGST act and SGST Act.
Query (Issue) Started By: – Kumar Kedia Dated:- 7-2-2019 Last Reply Date:- 9-2-2019 Goods and Services Tax – GST
Got 8 Replies
GST
Can two notices be issued simultaneously under section 70 of GST Act( Power to summon), one of which is issued under CGST act by Central Jurisdiction officer and the other one under SGST act by state jurisdictional officer?
Reply By KASTURI SETHI:
The Reply:
Both Centre and State authorities have separate jurisdictions. If unit falls in the jurisdiction of State GST Authority. and Central GST Office has already started investigation, Central GST Office will complete the investigation and forward draft SCN to the State GST Authority for issuance and vice ver
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