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2019 (2) TMI 1004 – APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA – TMI – Levy of GST – actionable claims or not – amount of issuance fee retained/forfeited by LSRPL – reward point based loyalty programme – challenge to Advance ruling decision – Held that:- It is very clear that the loyalty programme is a programme devised with the aim of generating and maintaining customer loyalty towards the partners entering into agreement with the appellants for the running and managing the overall scheme – It is not the appellant’s case that consideration for maintaining and facilitating encashment of payback points is flowing from the end customers. In fact it is admitted position that the amount received upfront from the Partners in respect of the generated payback points is booked as revenue in their account.
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The consideration for total payback points including those becoming unredeemed ones after validity period, has flowed from the Partners – this consideration has two components – f

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ame has become appellant’s revenue by virtue of the contract for servicing of the loyalty scheme including the points ibid, executed between the Partners and the appellants. Even if it is admitted that there is a provisioning of service by the appellant to the end-customers, there cannot be any such service or actionable claim against the payback points not redeemed by them against anyone. – HAAAR/2018-19/01 Dated:- 23-10-2018 – SMT. ASHIMA BRAR AND MRS. MANORANJAN K VIRK, MEMBER BRIEF FACTS OF THE CASE: The Present appeal has been preferred by the applicant M/S Loyalty Solutions and Research Pvt. Ltd. (LSRPLI) against the Advance Ruling No. HAR/HAAR/R/2017-18/4 Dated 11.04.2018 = 2018 (7) TMI 1421 – AUTHORITY FOR ADVANCE RULING – HARYANA passed in their application dated 12.01.2018. 2. The applicant namely M/s. Loyalty Solutions and Research Pvt. Ltd. (LSRPL), owns and operates a reward point based loyalty programme that is integrated towards it partners and their customers. Under th

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/or service charges fee. The LSRPL are paying GST on the management fee as well service charges charged by them from NICE. The pattern of this loyalty programme is as follows. a) on purchase of products of partners to this loyalty programme, end-customers get reward/ payment points. b) These rewards points can be redeemed by customers, while making future purchases of products of partners . c) In pursuance to these reward pöints management, partner transfers arnount equivalent to 0.25 of INR, per reward point, as issuance charges to LSRPL d) Whenever any purchase is made by end customer, by using/ redeeming rewards points, LSRPL transfers amount equivalent to 0.25 INR per reward point used to the concerned store and the concerned store gives discounts on the ,payment to be received from end-customer to this extent. e) The rewards points have validity period of 36 months, meaning thereby that the customer cannot redeem these reward points, after expiry of 36 months from the date of

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and Services Act, 2017, Haryana Goods and Services Act, 2017 or Integrated Goods and Services Tax Act, 2017 and therefore would be outside the scope and levy of GST. b) Whether the value of points forfeited of the applicant on which money has been paid by the issuer of points on account of failure of the end customers to redeem the payback points within their validity period can be treated as supply of any other goods or services and consequently be chargeable to GST under the CGST, HGST or IGST Act? Comments of the concerned officer U/S 98(1) OF THE CGST HGST ACT, 2012 6. The Deputy Excise & Taxation Commissioner (ST), Gurgaon (East), vide letter No.3086 dt.22.03.18, submitted the requisite comments on both the above questions raised by the applicant, as under: a) The applicant recovers the underlying value of 0.25 INR per reward point to the Customers of the partners enrolled under the loyalty programme and on issuance of such points the applicant charges issuance fees. However,

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om the partners on issuance of payback points @ 0.25 INR per payback point. Since these payback points are issued in exchange of some consideration and acts as an discount for the customers, who uses these payback points and the applicant transfers the consideration attached with payback points to the vendors. Therefore, the above stated transaction will attract GST. Decision of Advance Ruling Authority 7. Advance Ruling under Section 98 of the CGST/ HGST act 2017 was pronounced as under: I. The value of points forfeited of the applicant on which money had been paid by the issue of points on account of failure of the end customers to redeem the payback points within their validity period would amount to consideration received in lieu of services being provided by LSRPL to its clients and thus would be outside the scope of being considered as actionable claim other than lottery, gambling or betting and therefore would qualify as supply of services in terms of Section 7 of the Central Go

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nts known as Payback Points having standard value of 0.25 INR per reward point for making purchases from Partner stores. The Payback Points are issued by the Partner. (2) The Payback Points so issued can be redeemed by the End Customers with any of the Redemption Partners for buying goods or services within the Payback Coalition Network . Accordingly, such Payback Points are in the nature of debt or actionable claims which are to be honoured by the Appellant as and when presented for redemption. (3) Since the points are debt or actionable claims which are to be honoured by the Appellant, the underlying value of the Payback Points so issued to / or redeemed by the End Customers is recovered by the Appellant from its Partners either at the time of their issuance or at the time of their redemption depending on the business model opted by the Partners. (4) The Payback Points so issued, normally have a validity period of 36 months during which the said points can be redeemed by the End Cust

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they are shown as available for the customers to be redeemed / burnt. ii. As and when the customers burn / redeem the Payback Points available with them, the Partners become liable to compensate the Appellant for the underlying value of the Payback Points redeemed by the End Customers at their face value. iii. In such cases, in order to secure payment towards such Payback Points (as and when they are redeemed) the Appellant generally seeks securities such as Bank Corporate Guarantees to guarantee the payment of the value of the Payback Points which are redeemed by the End Customers iv. For providing the said services of loyalty program management, the Appellant realizes fixed fees, variable service fees and enrollment fees from its Partners ( Management Fees ) and discharge GST liability on the same. B. Issuance Model: i. The issuance model is identical to the aforesaid model except the fact that the payment of INR 0.25 per Payback Point is made upfront to the Appellant by the Partner

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debt, becomes income of the Appellant and is retained by the Appellant. It is pertinent to note that the Appellant always offers its Partners with the option to choose between either of the afore-mentioned business models where it is always up to the Partner as far as selection of business model is concerned. It is further pertinent to note that some of the Appellant s biggest Partners have opted for the redemption model which can be inferred from the fact that during the F.YF.Y. 2014-15, F.Y. 2015-16 and F.Y. 2016-17 60%, 51%, 49% of the revenue (excluding other income) earned by the Appellant respectively, was from redemption model partners as compared to 31 %, 43%,47% respectively, earned by the Appellant from the issuance model. In this regard, some of the commercial considerations due to which the Partners opt for issuance model, are as follows: i. Partners are reluctant to provide appropriate bank guarantees to the Appellant to guarantee the value of payback points which are red

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hat the only services provided under the present business model is management of loyalty program for which the parties consciously negotiated and agreed on a consideration which is referred here to as the Management Fee. The said Management Fee charged by the Appellant is not influenced in any manner by possible point expiry, Accordingly, commercially agreed amount reflects the true and correct consideration payable by to one party to another for rendition of an agreed service. Moreover, the retention of Point expiry Income is only a matter of chance and is totally contingent upon redemption of Payback Points by the End Customer and is not related in any manner to rendition of any service. Therefore, the Appellant since its inception is not providing any service in relation to such point expiry and therefore no GST liability can be fastened upon the Appellant in this regard. Actually for such point expiry, no services has actually happened. In light of the aforementioned factual scenar

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eir validity period can be treated as supply of any other goods or services and consequently be chargeable to GST under the CGST, HGST or IGST Act? 1. In this regard, a brief summary of the statement containing Appellant s interpretation of GST provisions vis-å-vis the aforementioned factual scenario, as made in the Appellant s application for advance ruling is as follows: i. While actionable claims have been expressly included under the definition of goods , only actionable claims in the nature of lottery, betting and gambling are covered under the scope of levy of GST In terms of Section 7 read with Entry 6 to Schedule III of the CGST Act and the HGST Act or IGST Act ii. Therefore, any goods which are in the nature of actionable claims would not be chargeable to GST unless such actionable claims are in the nature of lottery, betting and gambling. iii. In this regard, it was submitted that Section 2(1) of the CGST Act, defines the term actionable claim as follows: (I) actionable

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It was further submitted that since the Payback Points are not in the nature of lottery, betting or gambling, the supply of Payback Points cannot be treated as a supply of goods or services as per Schedule III of the CGST Act and the HGST Act. Accordingly, it was submitted that supply of such Payback Points is outside the scope and levy of GST under the CGST Act, HGST Act or the IGST Act. vii. Accordingly, any amount retained by the Appellant on account of lapsed Payback Points is nothing but a consideration for Payback Points, which, as discussed above, are in the nature of actionable claims and are therefore outside the scope or levy of GST. viii. It was further submitted that since any consideration received from issuance of an actionable claim is outside the purview of GST, the Appellant is of the view that any amount retained by the Appellant in relation to expired Payback Points would not be chargeable to GST. 2. That the personal hearing with respect to the aforementioned applic

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Points no longer remain to be in the nature of actionable claims . iii. Therefore, post the expiry of the said Payback Points, they are not covered within the specific exclusion provided under Schedule Ill of the CGST Act and the HGST Act. iv. Accordingly, the amount retained by the Appellant post the expiry of the Payback Points is nothing but revenue of the Appellant coming from the respective Partners which has been earned by them, owing to the activities of their providing services to the said Partners in the form of management of Loyalty Program. v. It was further stated that the agreement, entered into by the Appellant with its Partners for the provision of the services of Loyalty Program management, is also evident of the fact that revenue is retained by the Appellant post expiry of Payback Points. vi. The amount retained by the Appellant due to expiry of Payback Points is therefore liable to be considered as consideration for supply of services by the Appellant to its Partners

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oints (which are considered as actionable claim during their validity period in the impugned order of the Authority of Advance Ruling) changes post expiration of their validity period? and The amount retained by the Appellant on account of such expiration is therefore liable to be added to the value of taxable supplies made by the Appellant? (2) How can Payback points which are considered as goods during their validity period becomes supply of service post their expiration? 7. Being aggrieved by the finding of the Impugned Order the Appellant has preferred this appeal on the grounds mentioned hereunder which are without prejudice to one another. The Appellant craves leave, to add to, amend, modify, rescind, supplement or alter any of the grounds mentioned hereunder and/or produce such records, documents, calculations as deemed •necessary either before or at the time of hearing of this appeal. Questions being agitated by the Appellant in present APPEAL: 9. The appellants raised the

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017 reads as under: 100. (1) The concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced under sub-section (4) of section 98, may appeal to the Appellate Authority. (2) Every appeal under this section shall be filed within a period of thirty days from the date on which the ruling sought to be appealed against is communicated to the concerned officer, the jurisdictional officer and the applicant: Provided that the Appellate Authority may, if it is satisfied that the appellant was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days. (3) Every appeal under this section shall be in such form, accompanied by such fee and verified in such manner as may be prescribed. In terms of Section 100(2) the appeal was required to be submitted within 30 days from the date of communication of the Advance Ruling viz. 27th June 2018 but h

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ated 18.10.2017 and not a recent one as argued by the Appellant. That, in the absence of an evidence of application s timely receipt, the argument of timely dispatch held no good. That, the appeal has clearly become time-barred and right had already accrued to the authority to decide on the Appeal. However, the AAAR observed that given this to be a very initial phase of Advance Rulings or Appeals therein, a liberal view can be taken notwithstanding the non-adherence to time-schedule by the Appellant. Also, the Appeal being within the condonable period of further 30 days in terms of Proviso to Section 100(2) of the Acts ibid, the request for condonation of delay is being acceded to. b. Submission of the Applicant: During the hearing the appellant while reiterating the submissions made in their written reply put forth that the basic emphasis of their submissions was that an Actionable claim remains an actionable claim. They submitted that they are the holders of the IPR for the scheme of

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; vi. They are selling the payback points which are actionable claims therefore their revenue in the instant case has resulted from the sale of payback points/ Actionable Claims. vii. That, they charge Management fee from the Partners and the amount incurring on account of unredeemed points has no bearing on the consideration for the services provided to the Partners because in several cases 100% of the generated points get redeemed and no income occurs on account of unredeemed payback points. 12. Discussions: We have gone through the facts in case, the submissions of the Appellant and the record of personal hearing. The observations to the above mentioned point are enumerated below point-wise. Discussion in details has been taken up thereafter. i. There are 3 types of supplies, Goods , Services and Actionable Claims ; The submission of the appellant is misplaced. All kinds of actionable claims have been recognised as Goods in the GST Law. Relevant definitions are being reproduced for

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le claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; Thus, under the GST law, there are only 3 types of supplies – Goods or Services or both. Supplies of all actionable claims are the supplies of Goods for the purpose of GST law. Also, as discussed infra, the amounts accounted for as revenue from the unredeemed Payback-points by the appellant, do not qualify to be actionable claims. The discussion on this aspect has been taken up infra. ii. There are no Invoices issuable for the Actionable Claims ; As mentioned, the unredeemed Payback-points by the appellant do not qualify to be actionable claims. Admittedly, the appellants receive payment against the total generated points, upfront in terms of the contract executed with the partners and record the same as revenue in their accounts. Obviously the payment received from the Partners and accounted for as Revenue forms the consideration

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tion between the end-customers and the Partners . It is observed that necessary financial back-up for the generation and redemption of the points is provisioned by the Partners ; the generation forms a component of the overall functioning of the scheme by the appellant. v. That, the end-customers can directly sue them for non-redemption or deficiency of service; they have the option to sue them directly or the partner from the purchases with whom the points were generated. It is observed that as the name suggests and as it turns out from the tenets of the loyalty scheme as such, the loyalty program is aimed at generating, maintaining and retaining the end-customer s loyalty towards the Partners, for the requisite supplies. The end-customers undertaking the transaction identifies the Partner as the provider of the payback points and for the remedy for any deficiency in servicing of the promised payback points will naturally tend to turn up to/ sue the Partners. As such the handling of o

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Partners generate and retain loyalty of the customers undertaking any transactions with them. Even if it is deemed for the arguments sake that the appellants are selling the Payback points, the consideration flows to them for the same from Partners only. However it is not the appellant s case that there is a separate agreement with the partners for the same. Admittedly the transaction linked generation of payback points is a part of the service package for the overall management of the scheme by the appellants. It is further observed that the making available of the payback points to the end-customers is also not the selling of these points to the end-customers as the consideration for the same is coming from the Partners only. In fact there is no service either to the end customers, by the appellants on the same corollary that the consideration for the payback points or their maintenance and facilitation of redemption is flowing from the Partners and by virtue of the agreements execu

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t the time of the hearing it is very clear that the loyalty programme is a programme devised with the aim of generating and maintaining customer loyalty towards the partners entering into agreement with the appellants for the running and managing the overall scheme. It is not the appellant s case that consideration for maintaining and facilitating encashment of payback points is flowing from the end customers. In fact it is admitted position that the amount received upfront from the Partners in respect of the generated payback points is booked as revenue in their account. Obviously, the consideration for total payback points including those becoming unredeemed ones after validity period, has flowed from the Partners. We observe that this consideration has two components – fixed and variable. The fixed component is what has been received by the appellants by the name of Management Fee and the variable component is the amount booked as revenue in respect of the unredeemed leftover paybac

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GST – States – FIN/REV-3/GST/1/08(Pt-1)(Vol.1) /295 – Dated:- 23-10-2018 – GOVERNMENT OF NAGALAND FINANCE DEPARTMENT (REVENUE BRANCH) F.NO.FIN/REV-3/GST/1/08(Pt-1)(Vol.1) /295 Dated: 23rd October, 2018 NOTIFICATION In exercise of the powers conferred by sub-section (2) of section 23 of the Nagaland Goods and Services Tax Act, 2017 (4 of 2017), hereinafter referred to as the "said Act", the State Government, on the recommendations of the Council and in supersession of the notification of the Government of Nagaland; Finance Department (Revenue Branch) F.NO.FIN/REV-3/GST/1/08 (Pt-1)/481 dated the 27th September, 2017, except as respects things done or omitted to be done before such supersession, hereby specifies the categories of ca

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(HSN) code mentioned in the corresponding entry in column (3) of the said Table, when made by the craftsmen predominantly by hand even though some machinery may also be used in the process:- Table Sl. No. Products HSN Code (1) (2) (3) 1. Leather articles (including bags, purses, saddlery, harness, garments) 4201, 4202, 4203 2. Carved wood products (including boxes, inlay work, cases, casks) 4415, 4416 3. Carved wood products (including table and kitchenware) 4419 4. Carved wood products 4420 5. Wood turning and lacquer ware 4421 6. Bamboo products [decorative and utility items] 46 7. Grass, leaf and reed and fibre products, mats, pouches, wallets 4601, 4602 8. Paper mache articles 4823 9. Textile (handloom products) including 50, 58, 62, 63

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Conch shell crafts 96 26. Bamboo furniture, cane/Rattan furniture 94 27. Dolls and toys 9503 28. Folk paintings, madhubani, patchitra, Rajasthani miniature 97 Provided that such persons are availing the benefit of notification No. 03/2018 – Integrated Tax, dated the 22nd October, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1052 (E), dated the 22nd October, 2018: Provided further that the aggregate value of such supplies, to be computed on all India basis, does not exceed the amount of aggregate turnover above which a supplier is liable to be registered in the State or Union territory in accordance with sub-section (1) of section 22 of the said Act, read with clause (iii) of

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Goods and Services Tax – Started By: – harkirat singh – Dated:- 22-10-2018 – Dear Sir,After implementation of Good and Service Tax in India, we have supplied goods under Deemed Exports Scheme to domestic Buyer. We have obtained Advance Authorisations vide invalidation letter provided by domestic Buyer.Now goods have been supplied, Invoices were issued at the time of dispatching goods from our factory to domestic buyer.Kindly advise, whether, we have to get these invoice attested by GST departme

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Goods and Services Tax – Started By: – SHAHID HASHMI – Dated:- 22-10-2018 Last Replied Date:- 24-10-2018 – Sir, We are manufacturer and exporter of Wires & Cables. We are selling our products in domestic market as well as also exporting its outside India. We are getting MEIS Script. Now we are selling the MEIS Script in domestic market. Earlier there was IGST 12% /5%. As per recent Notification , Sales of script is come under exempted supply under Chapter heading 4907. My queries are as follows: (i) Whether at the time of supply of MEIS as goods covered under 4907 as exempt supply, is it fulfill the provisions of section 17(2) of the act. (ii) Whether we have to reverse the GST ITC (Credit) for the above supply in spite of we did not t

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Goods and Services Tax – Started By: – CASeetharaman KC – Dated:- 22-10-2018 Last Replied Date:- 24-10-2018 – Is a Government SEZ Authority formed by Act of parliament required to deduct TDS or would it be excluded under the proviso to Section 51 Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = In my view it is not required. – Reply By CASeetharaman KC – The Reply = Sir I subscribe to your view and wish it is correct but there are some areas which may be looked at 1. CGST Act Section 51 read with Section 20 of IGST Act TDS would be applicable to both intra and inter state transactions 2. The proviso says the the no deduction is required if location of the supplier and place of supply is in a different state than the state of registration of the recep

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n is reproduced below:- Registration of TDS deductors: A TDS deductor has to compulsorily register without any threshold limit. The deductor has a privilege of obtaining registration under GST without having required to obtain PAN. He can obtain registration using his Tax Deduction and Collection Account Number (TAN) issued under the Income Tax Act,1961. ……..This can be explained in the following situations. a) Supplier, place of supply and recipient are in the same state. It would be intra-state supply and TDS (Central plus State tax) shall be deducted. It would be possible for the supplier (i.e. the deductee) to take credit of TDS in his electronic cash ledger. b) Supplier as well as place of supply are in different states. In such cases, integrated tax would be levied. TDS to be deducted would be TDS (Integrated tax) and it would be possible for the supplier (i.e. the deductee) to take credit of TDS in his electronic cash ledger. c) Supplier as well as place of supply are in Sta

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the supplier 2. The question which arises here is that by virtue of Section 7 (5) of the IGST Act all supplies to SEZ units are interstate transactions – Does this mean that the Location of the Supplier and the Place of Supply is in a different state from the state of registration of the recepient ? Request your thoughts on these two points which would be very helpful – Reply By Alkesh Jani – The Reply = Sir, I acknowledge your concern. In this regards, as far as my knowledge permits me, I have following comments to offer:- In terms of Section 51 of CGST Act, 2017, the notified person is required to obtain registration as TDS. Normally, the TDS registration will be based on TAN, although holding PAN. Some Govt. Department such as Railway and postal department are example of holding PAN as well as TAN. TDS is required to deduct Tax if the contract value is more than ₹ 2,50,000/-. With regards to the query the SEZ authority formed by the Act of the parliament can be termed as SEZ

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 22-10-2018 – Goods Section 2(52) of the Central Goods and Services Tax Act, 2017 ( Act for short) defines the term goods as every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Actionable claim Section 2(1) of the Act defines the expression actionable claim as that shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882 Section 3 of the Transfer of Property Act, 1882, defines the expression actionable claim as a claim to any debt, other than a debt secured 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 recognize as af

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ST rate on lottery In respect of the Agenda Item on Lottery (17th GST Council Meeting) , the Council approved the following – The supply of lottery shall attract GST rates as under – Lottery run by State Governments – 12% of face value of lottery ticket (Face value to be inclusive of GST) Lottery authorized by State Governments – 28% of face value of lottery ticket (Face Value to be inclusive of GST ) Tax can be levied by the State Governments on the first point of sale by the State Government to the lottery distributor or the sole selling agent appointed by the State Government on reverse charge basis and to exempt agents/stockists below the distributor. Challenge before High Court on levy of GST on lotteries In Teesta Distributors and others v. Union of India and others – 2018 (10) TMI 941 – Calcutta High Court, the petitioners have sought a declaration that, lotteries are exempt from tax under Sl. No. 6 of Schedule III read with Section 72 of the Central Goods and Service Tax Act, 2

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Tax Act, 2017 can be made. When CGST, 2017 and IGST, 2017 propose to tax a lottery, it goes beyond the constitutional definition of goods . Since lottery is not goods within the meaning of the Constitution, neither Central nor the State Governments can enact any law for the purpose of levying sales tax on the lottery. Treating lottery to be a goods would do violence to the provisions of the Lotteries (Regulation) Act, 1998. Sale of lottery ticket is a trade under Article 301 to 304 of the Constitution. Differential rates of tax cannot be fixed for lottery tickets imported from other States and lottery tickets produced in the States. The discrimination in rates varies between 12 and 28 per cent. It is per se unsustainable and is required to be stuck down. All lottery tickets organized by the States have to be treated at par. The same percentage of tax is required to be levied. Otherwise it would violate the constitutional mandate. GST Council does not have any power or authority to bif

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he term goods used in Article 366(12) of the Constitution of India is very wide and includes all types of movable properties whether those properties are tangible or intangible and is an inclusive one. Lotteries are actionable claim and are included in the definition of goods . Lottery is not a commodity in the market which can be bought against consideration and on payment of consideration the property passes to the purchaser The Union Parliament and the State Legislature have the competence to levy tax on any item including lottery. The State is allowed to pick and choose districts, objects, persons, methods and rates of taxation, if the State, does so reasonably. The Legislature enjoys very wide latitude in classification for taxation. A statute cannot be declared unconstitutional solely on the ground that, it is unreasonable or arbitrary. The business of lottery partakes the character of betting and gambling. There exists no constitutional right to carry on the business of lottery.

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s 17th meeting. The rates are not discriminatory and are intended to preserve economic uniformity and the interest of the constituent States. According to him, the tax component is included in the price of the ticket. The end customer who purchased the ticket is not saddled with any additional tax burden. Union of India submitted the following before the High Court- Imposition of GST on lottery was discussed at length during the 17th GST Council meeting held on June 18, 2017. The States who are parties to the present writ petition were present in such Council meeting. The GST Council approved and resolved that, sale of lottery ticket will attract GST. The rates were also agreed upon. Therefore, the States should not be permitted to contend contrary to the resolution adopted by the GST Council in its meeting held on June 18, 2017. Since lottery tickets are sold at the price printed on them as inclusive price, that is, inclusive of all taxes, the value or supply of lottery under Section

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zed the various judgments of Supreme Court. In H Anraj v. State of Tamil Nadu – 1985 (10) TMI 258 – Supreme Court, it was held that lottery tickets to the extent that they comprise the entitlement to participate in the draw are goods falling within the definition of goods as given in Tamilnadu General Sales Tax Act, 1954 and Bengal Finance (Sales Tax) Act, 1941. Independent of the two state Acts under consideration therein, it has held that, a trade of a lottery ticket confers on the purchaser two rights. The High Court observed that a sale of a lottery ticket confers on the purchaser thereof two rights- a right to participate in the draw; and a right to claim a prize contingent upon his being successful in the draw. Both would be beneficial interests in movable property, the former in praesenti , the latter in futuro depending on a contingency. Lottery tickets, not as physical articles, but as slips of paper or memoranda evidence not one but both these beneficial interests in movable

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Act regarding goods , actionable claims , reverse charge , scope of supply , levy and collection which have also been found the State Goods and Services Tax Act. It regulates the levy and collection of tax on intra-State supply of goods or services or both in the State of West Bengal. Legislature enjoys very wide latitude in classification for taxation. Legislation or a provision contained in a statute can be invalidated on two grounds, namely, it is not within the competence of the legislature which passed the law; and/or it is in contravention of any of the fundamental rights stipulated in Part III of the Constitution or any other right/provision of the Constitution of India. A statute cannot be declared unconstitutional on the ground that, it is arbitrary or unreasonable. In the facts of the present case, it has not been substantiated that, the State Legislature promulgating the WB GST Act, 2017 did not have the competence to pass the law or that it violates any fundamental rights o

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, 2017 and WB GST Act, 2017. Third issue – levy of different taxes on lottery The rationale for imposing differential rates appears from the minutes of the 17th meeting of the GST Council. The rationale for the differential rate or the rates by themselves has not been substantiated to be breach of any provision of the Constitution. The State Government cannot challenge its own notification as unconstitutional as, it has the wherewithal to set the wrong, right. In the present case, the States of Sikkim, Mizoram, Nagaland and Arunachal Pradesh have supported the writ petitioner on the score that the rates of taxes are discriminatory. Such States were present in the GST Council Meetings. The resolution was carried by requisite majority. It was after extensive deliberations that, the GST Council had approved the rates as presently obtaining in respect of lottery. It is within the domain of such Council to decide the rate of tax. In such circumstances, the third issue is answered by holding

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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 22-10-2018 – Considering the first year of implementation of GST, major challenge is being faced by the Industry Inc in availing GST input tax credit ( ITC ) for the financial year 2017-18 after implementation of GST (i.e. July 2017 to March 2018) and lot of divergent views are floating with respect to the last date till which such ITC can be availed. Amongst others, most prominent apprehension is that the ITC for the period July 2017 to March 2018, can be claimed on or before due date of filing of the return in Form GSTR-3B for the month of September 2018, which is October 20, 2018. This view is engendered in the light of provisions of Section 16(4) of the CGST Act, 2017 ( the CGST Act ), which draws a time limit to avail ITC for a financial year as the earliest of due date of furnishing return under Section 39 for the month of September following the end of such financial year or furnishing of relevant annual return, whicheve

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of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier . Section 39 of the CGST Act, deals with the monthly return to be filed electronically, for every calendar month or part thereof, in such form and manner as may be prescribed, of inward and outward supplies of goods or services, ITC availed, tax payable, tax paid and other prescribed particulars, on or before the 20th day of the month succeeding such calendar month or part thereof. In this regard, Rule 61(1) of the CGST Rules, 2017 ( the CGST Rules ), prescribes Form GSTR-3 as the return to be furnished under Section 39(1) of the CGST Act. Further, Rule 61(5) provides that where the time limit for furnishing of details in Form GSTR-1 under Section 37 and in FORM GSTR-2 under Section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the retur

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the above discussed provisions, following views are possible in the context of last date to avail ITC for the period from July 2017 to March 2018: ITC for FY 2017-18 can be availed till the date of furnishing Annual return (i.e. December 31, 2018) – Section 16(4) of the CGST Act talks about the return filed under Section 39, which is Form GSTR-3 as per Rule 61(1) of the CGST Rules. Hence, Form GSTR-3B cannot be assumed to be a substitution for Form GSTR-3. Though, Rule 61(5) as amended provides that where the time limit for furnishing details in Form GSTR-1 and Form GSTR-2 has been extended, the Commissioner may specify the manner and condition subject to which the return shall be furnished through Form GSTR-3B. Therefore, the last date for availing ITC of any invoice/debit note for a financial year 2017-18, would be the earlier of the due dates for filing the GSTR-3 for September 2018 or furnishing of Annual Return for the year 2017-18. In so far as Section 39 is concerned which refe

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er 31, 2018. Further, vide Notifications No. 45 to 47/2018 – Central Tax dated September 10, 2018, due date of GSTR-1 and GSTR-3B for taxpayers who are migrating to GST as per procedure specified in Notification No. 31/2018 – Central tax dated August 6, 2018 was extended till December 31, 2018 for the period July 2017 to November 2018. Going by the provisions of first proviso to Rule 69 of the CGST Rules, a view may be taken to state that since the time limit for furnishing Form GSTR-1 has been extended till October 31, 2018 for July 2017 to September 2018, while Form GSTR-2 remains suspended, the date of matching relating to claim of ITC shall also be extended accordingly till October 31, 2018 for all regular taxable persons and till December 31, 2018 in case of recently migrated taxpayers as per procedure specified in Notification No. 31/2018 – Central tax dated August 6, 2018. Certain Operational Issues viz-a-viz Law provisions: Credit taken in books in the month of September 2018 w

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ntinuing with the above liberal interpretation of Section 16(4) of the CGST Act, one may consciously defer to file GSTR-3B for September till October 31, 2018, but it may happen that books of the Company for FY 2017-18 is closed by 30th September, 2018 and accordingly, any such entry booked in the month of October 2018, while ITC as per GSTR-3B will be reflected in the month of September, 2018. In such cases, there will be a reconciliation issue while filing Annual Return in Form GSTR-9 and GST Audit Report in Form GSTR-9C, in addition to late fees and interest as discussed supra. Suitable clarification required from the CBIC to clear the mist: It is highly important that the Government should come out with suitable clarification on last date till when the ITC for July 2017 to March 2018 can be availed. Apart from considering the legal jigsaw of multiple provisions under the CGST Act and Rules made thereunder, due consideration is also required to the fact that multiple date extensions

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Goods and Services Tax – GST – Dated:- 22-10-2018 – It has been brought to notice that there have been apprehensions by trade and industry relating to the last date for availment of ITC for the period July, 2017 to March, 2018. In order to remove doubts, it was clarified that as per the law, the last date for availing ITC in relation to the period from July, 2017 to March, 2018 is the last date for the filing of return in the FORM GSTR-3B for the month of September, 2018. In view of the said apprehensions and with a view to give some more time to the trade and industry, the last date for furnishing return in the FORM GSTR-3B for the month of September, 2018 is being extended up to 25th October, 2018. Relevant notification will follow short

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Goods and Services Tax – Detained of goods – invalid e-way bill – subsequent uploading of the Part-B would not efface the defect as pointed out by the Detaining Officer – Goods to be released on furnishing of bond. – TMI Updates – Highlights

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Goods and Services Tax – Supply or not? – The activity undertaken with respect to the share belonging to the partners (as described in the “Statement of relevant facts” of the subject Application) is

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Goods and Services Tax – Levy of GST – cold storage services for poultry eggs – The charges received by the applicant for providing service of storing of “fresh eggs” in shell on which no further proc

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Goods and Services Tax – Liability of tax – The applicant has received advance towards sale of villa prior to issuance of completion certificate. Hence, the same is taxable under GST Act @ 12%. – TMI Updates – Highlights

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Goods and Services Tax – Levy of GST – services of Pollution Testing of Vehicles – The Activity of issuance of Pollution Under Control Certificate for vehicles is not covered under SAC 9991 and is cov

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Goods and Services Tax – Levy of GST – charges received on account of washed away / cancelled contracts for supply of goods – Forward Contracts – agreeing to the obligation to refrain from an act, agr

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Goods and Services Tax – Input Tax Credit – The applicant is rendering taxable services during the construction of roads which is liable to tax; hence they are entitled to claim full ITC under the pro

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Goods and Services Tax – 3/2018 – Dated:- 22-10-2018 – Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Notification No. 3/2018 – Integrated Tax New Delhi, the 22nd October, 2018 G.S.R. 1052 (E).-In exercise of the powers conferred by section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) read with sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017) , hereinafter referred to as the said Act , the Central Government, on the recommendations of the Council, and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 8/2017 – Integrated Tax, dated the 14th September, 20

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, Heading, Sub-heading or Tariff item specified in column (2) of the Table contained in the said notification and the Description specified in the corresponding entry in column (3) of the Table contained in the said notification; or (ii) such persons making inter-State taxable supplies of the products mentioned in column (2) of the Table below and the Harmonised System of Nomenclature (HSN) code mentioned in the corresponding entry in column (3) of the said Table, when made by the craftsmen predominantly by hand even though some machinery may also be used in the process:- Table Sl. No. Products HSN Code (1) (2) (3) 1. Leather articles (including bags, purses, saddlery, harness, garments) 4201, 4202, 4203 2. Carved wood products (including b

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802 18. Stones inlay work 68 19. Pottery and clay products, including terracotta 6901, 6909, 6911, 6912, 6913, 6914 20. Metal table and kitchen ware (copper, brass ware) 7418 21. Metal statues, images/statues vases, urns and crosses of the type used for decoration of metals of Chapters 73 and 74 8306 22. Metal bidriware 8306 23. Musical instruments 92 24. Horn and bone products 96 25. Conch shell crafts 96 26. Bamboo furniture, cane/Rattan furniture 94 27. Dolls and toys 9503 28. Folk paintings, madhubani, patchitra, Rajasthani miniature 97 Provided that the aggregate value of such supplies, to be computed on all India basis, does not exceed the amount of aggregate turnover above which a supplier is liable to be registered in the State or U

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GST – States – 55/2018-State Tax – Dated:- 22-10-2018 – NOTIFICATION By the Commissioner of State Tax, Gujarat State, Ahmedabad Dated the 22th October, 2018 Notification No. 55/2018-State Tax No. GSL/S.168/B.20 In exercise of the powers conferred by section 168 of the Gujarat Goods and Services Tax Act, 2017 (Guj.25 of 2017) read with sub-rule (5) of rule 61 of the Gujarat Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), the Commissioner of Stat

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GST – States – CT/GST-14/2017/170 – Dated:- 22-10-2018 – GOVERNMENT OF ASSAM ORDERS BY THE GOVERNOR OFFICE OF THE COMMISSIONER OF STATE TAX ASSAM : : KAR BHAWAN NOTIFICATION No. 17/2018-GST The 22nd October, 2018 No. CT/GST-14/2017/170.- In exercise of the powers conferred by section 168 of the Assam Goods and Services Tax Act, 2017 (Assam Act No. XXVIII of 2017) read with sub-rule (5) of rule 61 of the Assam Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the

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2018 (10) TMI 1387 – PUNJAB & HARYANA HIGH COURT – 2018 (19) G. S. T. L. 412 (P & H) – Penalty u/s 129 of the Punjab Goods and Services Tax Act, 2017 and Haryana Goods and Services Tax Act, 2017 – detention of goods – Held that:- Considering the fact that the legal issues sought to be raised by the petitioners need examination in detail by the GST Council and the goods detained are still in custody of the Departments concerned, we deem it appropriate to direct the respondents to release the goods on furnishing of security other than bank guarantee or cash – appeal disposed off. – CWP Nos.23111 and 24162 of 2018 Dated:- 22-10-2018 – Rajesh Bindal and Mahabir Singh Sindhu, JJ. For the petitioner : Mr. Rishabh Kapoor, Mr. Saurabh Kapoor and

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ax in the country. In the cases in hand, penalty has been levied on the petitioners under Section 129 of the Punjab Goods and Services Tax Act, 2017 (for short, 'the Punjab Act') and Haryana Goods and Services Tax Act, 2017 (for short, 'the Haryana Act'). The goods detained are still in custody of the Departments concerned. Statutory appeals have been filed by the petitioners before the Appellate Authority in terms of Section 107 of the Act. As a pre-condition of filing appeal, 10% of the disputed tax amount has also been deposited. In terms of Section 107(7) of the Act, recovery of the balance amount is deemed to be stayed. Section 129(1)(c) of the Act provides that goods can be released on furnishing of security as prescri

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2018 (10) TMI 1618 – KARNATAKA HIGH COURT – TMI – Extension of date for uploading Form Tran-1 and Form Tran-2 – issuance of N/N. 48/2018 – Central Tax, New Delhi dated 10.09.2018 – Held that:- In view of the notification admittedly, the petitioner has an opportunity to upload its FORM GST TRAN-1 and FORM GST TRAN-2 at Annexures-G and H of the Writ Petition on the official website of the GST Council on or before 31.03.2019, and therefore, to this extent the relief prayed for in this writ petition stands granted by the GST Department extending the period for submitting the declaration upto 31.03.2019.
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The present writ petition is disposed of as infructuous, with a liberty and direction to the petitioner-assessee to upload the said FORM

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o respondent-Department, learned counsel for respondent-Department Mr.Jeevan J.Neeralgi, has produced before this Court a copy of Notification No.48/2018 – Central Tax, New Delhi dated 10.09.2018, which is quoted below for ready reference: [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)] Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Notification No.48/2018 – Central Tax New Delhi, the 10th September, 2018 G.S.R……(E).- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules further to amend the Central Goods and S

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common portal and in respect of whom the Council has made a recommendation for such extension. ; (b) in sub-rule (4), in clause (b), in sub-clause (iii), the following proviso shall be inserted namely:- Provided that the registered persons filing the declaration in FORM GST TRAN-1 in accordance with sub-rule (1A), may submit the statement in FORM GST TRAN-2 by 30th April, 2019. ; (ii) in rule 142, in sub-rule (5), after the words and figures of section 76 , the words and figures or section 125 shall be inserted. [F.No.349/58/2017-GST (Pt.)] 2. In view of the aforesaid Notification, admittedly, the petitioner has an opportunity to upload its FORM GST TRAN-1 and FORM GST TRAN-2 at Annexures-G and H of the Writ Petition on the official websit

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GST – States – ORDER No. 8/2018-GST – Dated:- 22-10-2018 – GOVERNMENT OF ASSAM ORDERS BY THE COMMISSIONER OF STATE TAX, ASSAM KAR BHAWAN, DISPUR, GUWAHATI-6 ORDER No. 8/2018-GST Dated Dispur, the 22nd October, 2018 Subject: Extension of time limit for submitting the declaration in FORM GST TRAN-I under rule 117(1A) of the Assam Goods and Service Tax Rules, 2017 in certain cases. No. CT/GST-12/2017/77.- In exercise of the powers conferred by sub-rule (1A) of rule 117 of the Assam Goods and Servi

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2018 (11) TMI 604 – BOMBAY HIGH COURT – TMI – Refund of IGST on goods exported – Held that:- The refund applications would be disposed of within a period of 8 weeks from the date the petitioners carry out the necessary modifications in the GSTR-1 and GSTR-3B forms and communicating it to the respondents – petition disposed off. – WRIT PETITION NO. 2483 OF 2018 Dated:- 22-10-2018 – M.S. SANKLECHA & RIYAZ I. CHAGLA, JJ. Mr. Arshil Shah a/w Ms. Parisha Shah for the petitioner Mr. Vijay Kantharia a/w Mr. Ram Ochani for the respondents P.C. 1. This petition under Article 226 of the Constitution of India seeks a refund of integrated goods and service tax paid in respect of the goods which have been exported. The refund short is aggregates t

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GST – States – G.O.(P) No. 162/2018/Fin – Dated:- 22-10-2018 – GOVERNMENT OF KERALA Finance (Streamlining) Department Dated, Thiruvananthapuram, 22/10/2018 G.O.(P) No. 162/2018/Fin ORDER As per the circular read as 1st paper above, it was clarified that for the purpose of Section 51 of GST Act, the Drawing and Disbursing officers (DDOs) shall obtain separate TDS registration based on TAN issued by Income Tax Department. Subsequently, Government of India vide circular read as second paper above, have issued detailed guidelines for deduction and deposit of TDS by the DDOs under GST Act as the same is to be done from 01.10.2018. To facilitate the deduction and deposit of TDS by the DDOs under Government of Kerala, a provision has to be enable

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re-requisite, the DDO/Deductor should be registered in GSTN and obtain registration number in GSTN as tax deductor, as per the circular first paper above. 2. The DDO should generate a chalan in the GSTN for the amount which has to be deducted as TDS before generating the bill and to note down the CPIN obtained. 3. While generating the chalan the following points are to be noted, (a) Component of GST shall be properly classified(SGST, CGST, IGST etc.) (b) The mode of remittance shall be NEFT/RTGS. (c) Select the name of Bank as Reserve Bank of India'. 4. After generating the chalan in GSTN, the DDO should generate bill through the appropriate application (for work bill of PWD etc, through EMLI, for Local body it is SANKHYA and other DDOs

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2018 (11) TMI 828 – CESTAT NEW DELHI – TMI – Levy of Tractor cess on the parts and accessories of the Tractors – Notification dated 06.09.1985 – appellant submitted that on perusal of the notification regarding imposition of tractors cess, it is evident that cess is leviable on ‘tractor’ and not on the parts, components and accessories thereof – Held that:- Part and accessories etc. of the tractor cannot be compared with that of the tractor itself. Therefore, the tractor cess is not leviable thereon in terms of Notification – Circular No. 41/88, dated 31.08.1988 issued by the Ministry of Finance, New Delhi regarding levy of cess on automobiles also goes in favor of appellant – appeal allowed – decided in favor of appellant. – Ex. Appeal No. 51888 of 2018 – Final Order No. 53213/2018 – Dated:- 22-10-2018 – Mr. Anil Choudhary, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) Sh. R. K. Ambwani, Advocate for the appellant Sh. H. C. Saini, AR for the Respondent ORDER Per: Anil Cho

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ntral Excise and Salt Act, 1944 and the Rules made thereunder has been made applicable for the purpose of levy and collection of tractor cess and hence the provisions of Section 11A of the Central Excise Act, 1944 are equally applicable in this case. It was alleged that the appellant by not paying the Tractor cess has contravened the provision of Rule 6 of the Central Excise Rules, 2002 read with Rule 3 of the Tractor Cess Rules, 1992, with intention to evade tax and therefore extended period of limitation was also applied as per Central Excise Act (supra). 3. Ld. Advocate appearing on behalf of the appellant submitted that on perusal of the notification regarding imposition of tractors cess, it is evident that cess is leviable on tractor and not on the parts, components and accessories thereof . As the Government of India has not notified the same by the independent notification. It is also impressed upon by the ld. Advocate that the tractor cess is applicable to the tractors only and

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d two annas per cent of the value of the goods. If the cess is levied in line with the Excise Tariff Act, 1985, this would exceed the maximum rate of 1/8th per cent prescribed in the IDR Act. Therefore, the cess may continue to be levied and collected on the vehicles in the condition they are cleared from the premises of the manufacturers and no cess should be levied again in case the body on the chassis is built by an independent body builder on the cess paid chassis . 3.1 It was therefore argued by the ld. Advocate that the ratio laid down in the aforesaid judgments are mutatis-mutandis applicable for imposition of tractor cess on the parts, components and accessories of tractor, is to be treated at par with that of automobile cess for the levy on the component and part of the automobile. He further stated that Commissioner (Appeals) has not considered the relevant provision of the IRDA Act, Notification regarding the imposition of cess on the tractor, in proper perspective and not d

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2018 (11) TMI 1265 – AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND – 2018 (19) G. S. T. L. 349 (A. A. R. – GST) – Levy of GST – reverse charge mechanism – payment to PWD, Uttrakhand for construction of road – time of supply when advance payment is released to PWD, Uttrakhand – levy of GST on amount deposited with Central Fund i.e Uttranchal CAMPA and reimbursed by MEA considering as part cost of the road – time & value of supply of services – applicability of Notification no. 13/2017 dated 28.06.2017.
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Held that:- M/s. NHPC is providing services to Central Government i.e. Ministry of External Affairs and will attract GST @ 12% but by virtue of Notification No. 12/2017 -Central Tax (Rate) dated 28th June, 2017 (as amended time to time), the supply of service in question, is exempted, thus sub-contracting of the said work contract to PWD Govt. of Uttarakhand is also exempted – the said activity comes under the purview of exempted category, therefore, question of payment of GST under r

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17 (herein after referred to as Act) and the rules made thereunder filed by M/s. NHPC, Admin Building, Tanakpur Power Station, Banbasa, Uttrakhand seeking an advance ruling on following issues: (a) Whether they are required to pay GST under reverse charge in terms of Notification No. 13/2017 dated 28.06.2017 while making payment to PWD, Uttrakhand for construction of road; (b) What is the time of supply when advance payment is released to PWD, Uttrakhand; (c) Whether the amount deposited with Central Fund i.e Uttranchal CAMPA and reimbursed by MEA considering as part cost of the road is liable for GST. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be Undertaken by the applicant. 3. As per the said sub-section (2) of Section 97 of t

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tted. 5. Accordingly opportunity of personal hearing was granted to the applicant on 27.09.2018. Shri. N.K. Gupta (Senior Manager) and Shri J.C. Pant (Manager Law) of the applicant appeared for personal hearing on said date and submitted documents describing therein exact nature of work being undertaken. Nobody appeared from the side of Revenue for the hearing. 6. From the documents submitted by the applicant we find that applicant is registered in Uttarakhand with GSTIN bearing no. 05AAACN 0149C4Z2. We further find that MOU to be signed between TPS, NHPC and PWD Govt. of Uttarakhand for construction of road from Tanakpur Barrage to Brahmdev (Nepal) on deposit work basis under Mahakali Treaty signed between India & Nepal. M/s. NHPC (implementing agency) in consultation with State Government of Uttarakhand will submit the road aligment and prepare project report. The said work has been entrusted by MEA to NHPC and PWD, Uttarakhand and the funding for the said project will be done by

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uilding, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, ii. works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. Thus the activity; of the applicant comes under the purview of supply of services. Before initiating proceedings, we have gone through the official web-site of NHPC Ltd & Ministry of Power, Govt. of India and we find that the promoter of M/s. NHPC Limited is Hon ble President of India through Ministry of Power Govt. of India. M/s. NHPC Limited is a Govt. of India Enterprise, incorporated in the year 1975 with an objective to plan, promote and organize an integrated and efficient development of hydroelectric power in all aspects. At present, NHPC Ltd is a Mini Ratna Category-I Enterprise of the Govt. of India. M/s. NHPC Ltd is under the administrative control of power ministry. From the record we find that NHPC Ltd &

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(5) 9C Chapter 99 Supply of service by a Government Entity to Central Government, State Government, Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority against consideration received from Central Government, State Government, Union territory or local authority, in the form of grants. Nil Nil ; We also find that that Government Entity has been defined in the said amended notification and the same read as under: Government Entity means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. From the aforesaid definition we observe that condition of 90% or more participation by way of equity or control to carry out a f

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ependent dis-conjunctive provisions and the expression 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution is related to sub-clause (ii) of Clause 2(s) alone. The clause (i) is followed by ; and the word or . Therefore, each of the sub-clauses is independent provision. The condition of 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution is relatable to only sub-clause (ii) of Clause 2(s). It means that an authority established by Government should have 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution to be eligible for exemption. The Authority set up by an Act of Parliament or State Legislature is not and cannot be made subject to the condition of 90% or more participation by way of equity or control to

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equity or by way of control, the entity would be considered as governmental entity , within the meaning assigned under the said amended notification. Accordingly we observe the M/s. NHPC Ltd falls under the definition of Government entity in as much as at the time of establishment of the company the Hon ble President of India and its nominees hold 100% equity shares of the company. There can be no government entity if the very essential ingredients for being recognized as a government entity gets lost over a period of time and the control or equity by way of 90% or more does not vest with the Government. We observe that a Company or a Society or a trust in addition to a authority or a board may continue to be in existence as they get incorporated and brought into existence under different Acts and law, for example a Company gets incorporated under the Companies Act, a society gets incorporated under Societies Registration Act etc, however such a incorporated legal entity/ person cannot

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blished by the Central Government and it is under. the administrative control of Ministry of Power, Government of India. iv. In present case the service receiver is Central Government i.e Ministry of External Affairs, Govt. of India v. The funds provided by MEA from its head Aid to Nepal to M/s. NHPC Ltd. This means that the funds provided by MEA or consideration received by NHPC Ltd from MEA is in the form of grants. vi. Work has been entrusted by Central Government i.e Ministry of External Affairs, Govt. of India Thus we observe that the applicant has fulfilled all the required criteria which leads their activity to exemption under Notification No. 12/2017 -Central Tax (Rate) dated 28th June, 2017 (as amended time to time) and accordingly we hold that the supply of service by M/s. NHPC to Ministry of External Affairs, Govt. of India is an exempted service. Since original supply of service i.e. work contract is exempted, therefore, sub-letting of the same is also exempted. On this mat

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exempt works contract service to Government and in such case if works contract is partially or wholly sub-contracted then the sub-contractor would also be exempt from payment of GST. In support of our view we place reliance upon the Government view on the issue in hand in pre-GST regime and the same are reproduce as under: (i) serial No. 29 sub-clause (h) of the mega exemption Notification 25/2012-ST dated 20.06.2012, which provides that service provided by following person in respective capacities are exempt from service tax: (h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt (ii) Circular No. 147/16/2011-Service Tax dated 21 10.2011 Clarification has, been requested as to whether the exemption available to the Works Contract Service providers in respect of projects involving construction of roads, airports, railways, transport terminals, bridges, tunnels, dams etc., is also available to the sub-contr

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d work contract to PWD Govt. of Uttarakhand is also exempted. In view of the above we observe that the said activity comes under the purview of exempted category as discussed supra, therefore, question of payment of GST under reverse charge in terms of Notification No. 13/2017 -Central Tax (Rate) dated 28.06.2017 does not arise. (B) Since their activity is a exempted service, issues of time of supply and applicability of GST on reimbursement lost its relevancy. Accordingly we hold that the no provisions of GST are applicable on said issues. ORDER In view of the above discussions & findings we order as under: (i) No GST is applicable on the activity of the applicant since the same falls under exempted services in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended time to time) (ii) On the issues of time of supply and applicability of GST on reimbursement, no provisions of GST is applicable on said issues as supply of service in question falls under exe

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