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2018 (10) TMI 302 – AUTHORITY FOR ADVANCE RULING, GUJARAT – 2018 (18) G. S. T. L. 75 (A. A. R. – GST) – Supply of goods or Supply of services? – use of explosives in the blasting activity – Whether the blasting activity carried out by the applicant is to be considered as a 'supply of goods' or 'supply of service'?
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Held that:- In the present case applicant uses explosives in the blasting activity at their client’s site. Thus it would be evident that blasting activity is carried out by the applicant for their client for which the applicant uses explosives. The applicant carries out blasting work with the aid of explosives. Thus, there is deemed supply of explosives in this case in view of the judgement of Hon’ble Supreme Court in the case of Bharat Pest Control (supra) as well as the supply of service in the form of the blasting work. Therefore, the situation as narrated by the applicant is a composite supply of goods and services and shall be covered by Section 2(30) and Section

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rrying out blasting activity, client inform the applicant number of holes to be charged at the site; that prior to initiating blasting activity, applicant with the help of shot firer determines the quantity of explosives to be filled in each hole and as per requirement, applicant fills every hole with approximately same quantity of explosives and thereafter each hole is connected to each other via detonators and/or detonating fuse and safety fuse; that each hole is connected to each other and network is created in such a manner that each hole is blasted in the manner and sequence as required. 1.2 The applicant further submitted that during the entire blasting activity, explosives are neither handed over to the client nor is it in possession of client; that any quantity of explosives or other material left after carrying out blasting activity is transferred back to the Magazine of the applicant. 1.3 The applicant has further stated that it is imperative to decide whether applicant is ca

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lso considered the comments on the application offered by the department vide letter F.No. IV/16-64/Tech/2017-18 dated 18.01.2018. 3. In order to decide the present issue, the judgement dated 30.01.2018 of Hon ble Supreme Court in the case of State of Gujarat Vs. Bharat Pest Control [Civil Appeal No. 1335 of 2018] = 2018 (5) TMI 1334 – SUPREME COURT OF INDIA, is relevant, wherein it has been held as follows :- 5. A Constitution Bench of this Court in Kone Elevator India Private Limited vs. State of Tamil Nadu [2014 (5) TMI 265 – SUPREME COURT], while considering the correctness of its earlier view with regard to dominant nature of the contract test, had, apart from holding that the dominant nature test would no longer be determinative, considered paragraph 56 of the report in Larsen & Toubro Limited 2 (2014) 7 SCC 1 = 2013 (9) TMI 853 – SUPREME COURT (supra) and has accepted the same to be the correct position in law. 6. In view of the above position of law enunciated in Larsen &am

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2018 (11) TMI 1196 – CESTAT CHENNAI – TMI – Distribution of CENVAT Credit – area based exemption – the input service credit eligible / availed by units availing area based exemption were distributed to the appellant unit at Puducherry which according to department is not eligible – Held that:- In the present case, the appellant has availed the credit on ISD invoices distributed by their Head Office. To such availment or utilization of credit by appellant, the proviso to Rule 3(4) does not apply at all – the demand raised alleging that the appellant has violated provisions of Rule 2(l) r/w proviso to Rule 3(4) cannot sustain.
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CENVAT Credit – input service – membership fee for membership in Bombay Gymkhana Club Ltd. – Held that:- Such membership fee paid by the appellant does not have any nexus with their manufacturing activity – credit not allowed – demand upheld.
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Appeal allowed in part. – Appeal Nos. E/40803 and 40804/2017 – Final Order Nos. 42352-42353/2018 – Dated:- 27-8

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6/2002-CE dated 14.11.2002. According to department, in terms of third proviso to Rule 3(4) of CENVAT Credit Rules, 2004, the CENVAT credit of duty and service tax paid on the inputs or input services used in the manufacture of final products cleared after availing of the exemption under the above notifications shall be utilized only for payment of duty of final products in respect of which the exemption under the said notification is availed. Through ISD invoices issued by their Head Office, the appellants availed credit of service tax paid on input services consumed by the units availing area based exemption. Thus, the input service credit eligible / availed by units availing area based exemption were distributed to the appellant unit at Puducherry which according to department is not eligible as it is contravention of the provisions of Rule 2(l) r/w third proviso to Rule 3(4) of CENVAT Credit Rules, 2004. The second issue is that the credit of service tax availed on membership fee f

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sed on ISD invoices to the appellant unit situated at Puducherry. The input services which were used commonly by all the units including the units availing area based exemption were distributed by the head office, which is registered as ISD. The demand has been confirmed on wrong and erroneous interpretation of third proviso to Rule 3(4) of the CENVAT Credit Rules, 2004. The said proviso does not restrict availment of credit by units availing the area based exemption. It only restricts utilization of the credit. As per the show cause notice, the department alleges wrong availment of credit by appellant which is distributed by their head office as per ISD invoices. The credit has been distributed by the head office as per Rule 7 of CENVAT Credit Rules, 2004. The said Rule does not provide for any pro-rata distribution prior to 1.4.2012. During the disputed period, which is from December 2006 to March 2011, Rule 7 did not provide for pro-rata distribution of credit and whatever credit av

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), the appellants are not eligible for credit and the demand raised is legal and proper. 5. Heard both sides. 6. For better appreciation, proviso to Rule 3(4) is reproduced as under:- Provided further that the CENVAT credit of the duty, or service tax, paid on the inputs, or input services, used in the manufacture of final products cleared after availing of the exemption under the following notifications of Government of India in the Ministry of Finance (Department of Revenue):- (i) No. 32/99-Central Excise, dated the 8th July 1999 [GSR 508(E) dated 8th July 1999]; (ii) No. 33/99-Central Excise, dated the 8th July 1999 [GSR 509(E) dated 8th July 1999]; (iii) No. 39/2001-Central Excise, dated the 31st July 2001 [GSR 565(E) dated the 31st July 2001]; (iv) No.56/2002-Central Excise, dated the 14th November, 2002 [GSR 764(E) dated the 14th November, 2002]; (v) No.57/2002-Central Excise, dated the 14th November, 2002 [GSR 765(E) dated the 14th November, 2002]; (vi) No.56/2003-Central Excise

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ling the exemption as per the notification. The department lays stress on the word ―shall be utilized only‖ and has raised the demand alleging that the credit on input services which have been availed by all the units cannot be distributed by the head office on the premise that the area based exemption units have to utilize the credit only for payment of duty of final products to which the area based exemption applies. Interestingly, the show cause notice is not issued to such units who have availed area based exemptions. The appellant situated in Puducherry has availed credit on the ISD invoices issued by their Head Office. Prior to 1.4.2012 there was no restriction as to how much credit can be distributed to each unit. During the relevant period, Rule 7 did not lay down any manner of distribution based on pro-rata basis. The said proviso under Rule 7, during the disputed period read as under:- RULE 7. Manner of distribution of credit by input service distributor. – The in

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, the proviso to Rule 3(4) does not apply at all. We therefore are of the view that the demand raised alleging that the appellant has violated provisions of Rule 2(l) r/w proviso to Rule 3(4) cannot sustain and requires to be set aside, which we hereby do. 6.2 The demand of ₹ 1,86,113/- has been raised alleging that the appellant has availed credit on membership fee of Bombay Gymkhana Club Ltd. and that these are not eligible input services. After perusing the records, we agree with the view taken by the authority below as we find that such membership fee paid by the appellant does not have any nexus with their manufacturing activity. The demand raised on this ground is therefore upheld without any interference. 7. From the above discussions, we hold that the impugned order is set aside except to the extent of upholding disallowance of credit of service tax paid on membership fee. The appeals are partly allowed in the above terms, with consequential benefits, if any. (Operative p

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Goods and Services Tax – Started By: – Vijaykumar Boora – Dated:- 26-8-2018 Last Replied Date:- 29-8-2018 – He'll sir, I am small vendor, I am in embroidery Business. I do embroidery on different fabrics (cotton, velvet, Nylon, silk, etc). In this regards I want to know HNS to be applicable as I Following under the chapter 58 of HSN code but I confused whether I follow this or needs to follow HSN applicable to different fabrics, as embroidery is done on that fabrics. Please can you clarify that HSN applicable. – Reply By Rajagopalan Ranganathan – The Reply = Sir, Your product will fall under heading 5810 attracting CGST 6% and SGST or UTGST 6% or 12% IGST if the supply made is inter-state. Please refer to Sl. No.156 of Notification No.

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Goods and Services Tax – Started By: – Archna Gupta – Dated:- 25-8-2018 Last Replied Date:- 27-8-2018 – I have one query regarding place of supply. The situation is if a person supplying some art work, decorative items, paintings etc. to Indian embassy in China but the order is given by ministry of external affairs and he will raise invoice to Ministry of external affairs in India. Will it be treated as export? Do bill to ship to model works for supplying goods out of India? – Reply By Rajagopalan Ranganathan – The Reply = Madam,You are supplying the goods to Ministry of External Affairs. Therefore both supplier and recipient are located in India though the goods supplied is meant for Indian Embassy in China. Therefore you have to pay IGST

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, as order is not from the Embassy in Chaina. Here, Ministry is required to take registration under GST and has to engage CHA for export to embassy.Our experts may like to correct me if mistaken.Thanks – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = I endorse the views of Shri Rajagopalan sir – Reply By Ramaswamy S – The Reply = If the supplier is in Delhi, any supply to Ministry of External Affairs is a local supply. That is point of supply – Intra State. (CGST + Delhi GST).If the supplier is other than Delhi, then the point of Supply is Inter State and IGST is payable.it is not an export in such case.If the goods are shipped directly to the Indian Embassy in China, it is an export. Its advisable to ship to Ministry rather than to India

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Goods and Services Tax – Started By: – Manjunath S – Dated:- 25-8-2018 Last Replied Date:- 1-9-2018 – Dear Experts,We are a registered Manufacturers in Karnataka,In July 2018, We Purchase a Machinery spares by paying IGST, after installation of that spares, it is get damaged within10 days, but actual warranty for that material is 1 year.We intimated the supplier and he agreed to give replacement, and he told us to scrap that material since it is UnRepairable/Exposed.Now he is supplying New Material with Another Tax invoice with IGST and giving Credit Note only for the Basic Amount for the rejected material.My Query is:a) Is this Procedure is correct ?b) Is it require to reverse IGST Credit availed from us for the rejected material ? but su

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ervices or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed: Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person. Therefore in your case since Machinery spares were supplied by paying IGST the incidence of IGST had already been passed on to you and you could have availed ITC of the same. Ther

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Goods and Services Tax – Release of detained vehicle with goods – e-way bill was not tendered for the goods in movement – The modus operandi adopted by the petitioner is to transport the goods without

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Goods and Services Tax – Seeks to extend the due dates for filing FORM GSTR-3B for the months of July, 2018 and August, 2018 – TMI Updates – Highlights

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 25-8-2018 Last Replied Date:- 27-8-2018 – Under section 16 the GST law, during the transition from pre-GST regime to GST regime w.e.f. 1.7.2017, earlier tax credits are allowed to be carried forward in GST regime and benefit could be availed subject to transitional provisions as contained in section 140 of the GST law. While there are doubts amongst taxpayers as to whether Cenvat Credit of Cesses (e.g., Krishi Kalyan Cess, Swachh Bharat Cess etc) paid under pre-GST regime would be allowed to be carried forward and availed in the GST regime like other taxes or duties, assessees have resorted to advance ruling under section 97 of the GST law from Authority of Advance Rulings (AAR) constituted under section 96 of the said law. The background of this case is that KKC was levied as per section 161 of the Finance Act, 2016. Section 161(5) of the Finance Act specified that for levy and collection of KKC, Chapter V of Finance A

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t Credit Rules has recognized KKC as Cenvat credit and Section 16 and Section 17 of the Act, which determines admissibility of input tax credit puts no restriction in admission of KKC as Cenvat credit under the aforesaid provision of the Act. According to one such advance ruling in the matter of Kansai Nerolac Paints Ltd. (2018) 12 GSTL 526 (AAR-Maharashtra); (2018) 5 TMI 458 (AAR-Maharashtra); in the pre-GST regime, the assessee was registered as Input Service Distributor (ISD) for its Head Office to distribute eligible credit to its respective manufacturing units. The assessee wanted to carry forward the accumulated credit of Krishi Kalyan Cess (KKC)appeared in service tax return on June 30, 2017 to the electronic credit ledger under the GST Act. In the post-GST regime, neither there is specific restriction in law regarding admissibility of KKC nor there is any specific provision regarding admissibility of KKC as input tax credit. It filed the application for Advance Ruling regarding

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(Civil) 7837 of 2016] [ 2018 (2) TMI 1264 – DELHI HIGH COURT ] case denied cross utilisation of unutilized education cases against excise duty and service tax liability as these cesses had not been subsumed and there was no provision in law to cross utilize the unutilized education cesses with excise duty and service tax. Secondly, one of the response given by CBEC in its FAQ s had negated the assessee s claim. (which does not have any legal binding). Being aggrieved, the applicant preferred an appeal u/s 100 of the GST law before Appellate Authority for Advance Ruling (AAAR) which approved the aforementioned ruling of AAR by passing an order u/s 101 of the GST law. The AAAR examined the erstwhile Cenvat Credit Rules, 2004 and formed a view that KKC could be utilized towards payment of KKC only. The KKC cannot be adjusted or cross utilized against the payment of excise duty or service tax. It was made expressly clear that Cenvat credit of input duty specified in the rule 3 i.e. excise

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Other Topics – By: – Legal Raasta – Dated:- 25-8-2018 Last Replied Date:- 25-8-2018 – August 7th Tuesday, the Lok Sabha passed 4 new bills in an attempt to GST procedures with a focus on empowering the MSME (Micro, Small and Medium Enterprises) sector. The government is also targeting to plug loopholes in existing laws and lightening ROC compliances requirements described as complex by many a business owners. The new return filing system is expected to be put in place by the revenue department by January 2019 and would actively replace the current GSTR-3B and GSTR-1 returns. In addition to these, an attempt has been made for the empowerment of digital payments such as UPI with incentives via cashback offers. The Lok Sabha also facilitated changes in GST return filing forms and also helping in reducing the frequency of return filings for businesses. The bills passed by the Lok Sabha are Central GST(Amendment) Bill, 2018 Integrated GST (Amendment) Bill, 2018 Union Territory GST (Amendme

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inue to have dates of filling vary based on the turnover of the company. The simplified GST return filing forms have prospects for: Reducing Confusion among Taxpayers The government plans to introduce a modular approach in which the aim is to introduce many business types into a simple form. Various modules in one common return will facilitate the filing process for eg. One for traders and one for exporters. The one form approach will help taxpayers pick and choose their type of business module and go to a section which remains relevant to other traders. According to the finance minister This kind of a modular approach will help significantly in improving the compliance process too . 2. Decreasing the number of returns from 36 to 12 a year. Return filings frequency will drop and single return procedures will be introduced per monthly basis to help facilitate the compliance process. 3.One-Monthly return Barring a few exceptions like composition dealers, all taxpayers shall file one mont

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ment of tax by the seller, automatic reversal of input tax credit from buyer has been prohibited. Options have been put in place to make recovery of defaults in payment of tax by the retailer. In addition to this, however, special provisions have been made to address exceptional situations like the closure of Business, missing dealer or supplier lacking assets to return due payment. 7. Process for recovery and reversal Issuing of notice and order will be done in an online and automated process to reduce the human interface. 8. Supplier Side Control Sellers who have defaulted in payment of taxes above a certain threshold will be blocked from raising invoices to avoid misuse of input tax credit facility. Safeguards like these will be deployed for new dealers as well as addition, analytical tools would be employed to prevent loss of revenue. 9. Transition Transition to the new system will be achieved in three stages. Stage 1: Filing of return GSTR 3 B and GSTR 1. Stage 1 cannot exceed 6 m

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2018 (9) TMI 1257 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (17) G. S. T. L. 526 (A. A. R. – GST), [2018] 59 G S.T.R. 355 (AAR) – Levy of GST on goods/services/both – applicability of Ocean freight Charges and System of double taxation with respect to import of raw materials of fertilizers – exclusion of any component of expenditure upon imported goods (Ocean freight) – scope of Section 97 of CGST/RGST Act, 2017.
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Whether in the case of import of goods on CIF (COST, INSURANCE AND FREIGHT) basis, the Applicant (Importer) is liable to pay GST on the component of Ocean freight paid by the foreign supplier to the shipping company, as consideration for availing the service of transportation of goods by sea provided by the foreign shipping entity?
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Whether in the case of import of goods on FOB (Free on board) basis the Applicant (Importer), for the purpose of determination of value of goods for the payment of IGST on import of goods is required to exclude the value of the c

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authority is not empowered to decide on the issue of valuation of imported goods. Therefore, this authority cannot give any findings regarding exclusion of any component of expenditure upon imported goods (Ocean freight) while determining the value of imported goods at the time of import – The question raised by the applicant is regarding the determination of valuation of imported goods at the port. The issue regarding determination of value as sought by the applicant does not fall under the purview of CGST/RGST Act, 2017 as this issue should be correctly dealt as per the relevant provisions of the Customs Act, 1962.
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Ruling:- The applicant is liable to pay IGST on transportation of goods by vessel under Reverse Charge Mechanism (RCM) under Notification No. 10/2017- Integrated Tax (Rate) dated 28.06.2017 – Regarding exclusion of any component of expenditure upon imported goods (Ocean freight) while determining their value at the time of import, the same falls beyond the purview of

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ty. Based on the above observations, the application is admitted to pronounce advance ruling. 1. SUBMISSION OF THE APPLICANT: 1. The applicant has sought an Advance Ruling on the applicability of Ocean freight Charges and System of double taxation with respect to import of raw materials of fertilizers. The Applicant is engaged in the trading business of goods like DAP, MOP. The said goods are purchased from a country outside India and imported into India. The applicable rate of IGST (import as well as on sale) on DAP and MOP is 5%. The said goods are imported either on CIF (Cost Insurance and Freight) basis or on FOB (Free on Board) basis. 2 Statement of facts:- While importing the said goods on CIF basis, the supplier/ exporter located in the foreign country is liable to bear the cost of transportation of goods, from the respective country upto Indian ports. Hence, for the transportation of the goods, the supplier/ exporter avails the services of a foreign shipping company, for bringi

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ation ). Entry 10 of the RCM SL.No. Category of Supply of Services Supplier of service Recipient of service 10. Services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. A person locate in non-taxable territory Importer, as define in clause (26) of section 2 of the Customs Act, 1962(52 of 1962), located in the taxable territory. Notification is relevant to the present case. The said entry reads as follows: The importer, in terms of the Customs Act, 1962 may or may not be the service recipient. Hence, the Notification appears to be ultra-vires to the provisions of the Act. That under the service tax regime, i.e. prior to 01.07.2017, the government was empowered to notify the category of services on which tax was payable on reverse charge basis by the recipient of services or any other person. To this extent the provisions of the service tax regime differ from th

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ods in a vessel on reverse charge basis in terms of Section 5(3) of the IGST Act. Moreover, upon importation of the goods, customs duty is payable on the said goods at the time of clearance of the said goods. As per Section 7 of the IGST Act, import of goods will be considered as an inter-state supply. Hence, IGST is leviable on the same. However, as per the provisions of proviso to Section 5(1) of the IGST Act, the same is levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act ) as amended by the Taxation Laws (Amendment) Act, 2017 (hereinafter referred to as the Amendment Act ), which levies the additional duty on the goods imported into the territory of India. The relevant provisions read as follows: Section 5- Levy and Collection- Ijj*** Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Custom

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ustoms Act, 1962 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include the tax referred to in subsection (7) or the cess referred to in sub-section (9).; On the conjoint reading of proviso to section 5 of the IGST Act and section 3(7) of the Tariff Act, it can be inferred that integrated tax shall be levied on the goods imported into India. The said integrated tax shall be in addition to the other duties of customs as specified under section 3 of the Tariff Act. As per section 3(8) of the Tariff Act the integrated tax on the imported goods shall be levied on the value of the imported article determined in accordance with section 14(1) of the Customs Act. Section 14 of the Customs

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royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf: As per section 14(1) of the Customs Act, the value of imported article shall be the transaction value . The transaction value is the price actually paid or payable for the Goods when sold for export to India for delivery, at the time and place of importation, provided that the buyer and the seller are not related and the price is the sole consideration for sale. Further, the proviso to section 14(1) states that the transaction value of the imported article, among other charges as specified, will also include cost of transportation to the place of importation. Moreover, Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred to as the Valuation Rules ) lays down the provisions to determine the transaction value of the imported Go

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ble to pay GST on the component of Ocean freight paid by the foreign supplier to the shipping company, as consideration for availing the service of transportation of goods by sea provided by the foreign shipping entity? (b) Whether in the case of import of goods on FOB (Free on board) basis the Applicant (Importer), for the purpose of determination of value of goods for the payment of IGST on import of goods is required to exclude the value of the component of Ocean freight paid by the Applicant (importer) to the foreign shipping entity, on which already GST is paid by the applicant (importer) being the service recipient in order to avoid double taxation? 4. Personal Hearing (PH) In the matter personal hearing was given to the applicant, Mr. Sanjay Jhanwar, (Advocate) and Ms. Aditi Lodha (Advocate) of applicant appeared for personal hearing on 17.08.2018. During the PH they submitted a flowchart depicting CIF and FOB. They have also submitted a Supreme Court judgement Govind Saran Gang

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ST Act ). Hence, IGST is leviable on the same under Section 5 of the IGST Act. As per the charging section i.e. Section 5, IGST has to be paid by the taxable person. The Entry No. 10 of the Notification No. 10/2017- Integrated Tax (Rate) dated 28.06.2017 (hereinafter referred to as the RCM Notification ) reads as under:- SL.No. Category of Supply of Services Supplier of service Recipient of service 10. Services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. A person located in non-taxable territory Importer, as defined in clause (26) of section 2 of the Customs Act, 1962(52 of 1962), located in the taxable territory. Thus, as per the Notification No. 10/2017- Integrated Tax (Rate) dated 28.06.2017, in the case of import of goods on CIF (COST, INSURANCE AND FREIGHT) basis, the Applicant (Importer) is liable to pay GST on the component of Ocean freight paid by

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ed that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962. From the proviso to Section 5(1) of IGST Act, 2017, it is clear that the levy and collection of IGST on imported goods would be in accordance with the provisions of the Customs Tariff Act, 1975 and value of imported goods will also be governed by the Customs Valuation (Determination of value of Imported Goods) Rules, 2007 issued under Customs Act, 1962. Hence valuation of imported goods is to be done by the Customs Authority under the Customs Act, 1962 and this authority is not empowered to decide on the issue of valuation of imported goods. Therefore, this authority cannot give any findings regarding exclusion of any component of expenditure upon imported goods (Ocean fre

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GST – States – (15/2018) No. FD 47 CSL 2017 – Dated:- 25-8-2018 – FINANCE SECRETARIAT NOTIFICATION (15/2018) No. FD 47 CSL, 2017, Bengaluru, dated: 25-08-2018 In exercise of the powers conferred by Section 148 of the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act 27 of 2017), the Government of Karnataka hereby makes the following amendment in the Notification(14/2018) No. FD 47 CSL 2017, dated the 10th August, 2018, published in the Karnataka Gazette, Extraordinary, Part-IVA, No. 125

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2018 (9) TMI 1334 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (17) G. S. T. L. 445 (A. A. R. – GST) – Classification of services – Works Contract – Pure services – Services provided to Local Authority or Governmental Authority or Government Entity – PMC shall review detailed designs prepared and submitted by the Contractor for execution purposes keeping in view the applicable technology, applicable regulations and guidelines and the Employer's Requirements. – Applicability of a notification issued under the provisions of this Act – determination of the liability to pay tax on any goods or services or both.
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Whether service provided by ws PDCOR Ltd is correctly classified under SAC Code 9983? – Held that:- The services provided by M/S PDCOR Ltd is classifiable under SAC Code 9983
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Whether Jaipur Development Authority falls under the definition of Local Authority or Governmental Authority or Government Entity? – Held that:- Jaipur Development Authority (JDA) is a Governme

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ting Services (PMCs) for Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur” are correctly classified under SAC Code 9983.
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Jaipur Development Authority (JDA) is a Governmental Authority.
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The PMC Services provided by M/S PDCOR Ltd. to JDA under the “ “Project Management Consulting Services (PMCs) for Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur awarded to them vides their MOA dated: 01.09.2017 are covered under Sl. No.3 of GST under Notification 12 /2017 Central Tax (Rate) dated 28/06/2017 (Notification No. F.12 (56) FD/Tax/2017-Pt-1-50 Dated 29/09/2017 issued by the Government of Rajasthan.) and hence exempt from GST. – RAJ/AAR/2018-19/13 Dated:- 25-8-2018 – NITIN WAPA AND SUDHIR SHARMA MEMBER Present for the applicant: Mr. Subhash Sharma (CFO) and Mr. Manmohan Mahipal (CA) Authorised Representative Note: Under Section 100 of the CGST/RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted unde

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ipur Development Authority (JDA) Government of Rajasthan has signed a Memorandum of Agreement (MoA) dated 1-9-2017 for a period of 12 Months for Project Management Consulting Services (PMCs) for Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur, Rajasthan including Area Development. (herein after referred as the project also) (c) The applicant will provide PMC services to JDA regarding the works being carried out by TATA Projects Ltd. in relation to Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur . The agreement between TATA Projects Ltd. and JDA was executed on 18th of March, 2016. (d) In this instant case, the applicant is concerned whether the PMC services to JDA for Rejuvenation of Amanishah Nallah (Dravyavati River), Jaipur will attract GST or will be exempt from GST as per Serial No. 3 of CGST Notification No. 12/2017 dated 28th of June, 2017?. Further, the applicant wants the authority to clarify whether their services for the concerned project will be unde

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, periodic progress reports, and rendering advice on counter measures/ corrective actions required for overcoming bottlenecks/ problems encountered during the execution of the Project. 3. Brief scope of PMC will be as follows: The PMC shall review detailed designs prepared and submitted by the Contractor for execution purposes keeping in view the applicable technology, applicable regulations and guidelines and the Employer's Requirements. The reviewed and/or modified drawings will then be released for construction at site. The design/drawing shall cover the following: a. Topography survey, L-sections and cross section of nallah. b. Hydraulic design of nallah section sufficient to discharge the highest flood generated by rain over a 100 years recurrence period. c. Comprehensive drawing of main nallah channel showing the proposed structures check dams, de-silting walls, crossing strictures and access road etc. d. Hydraulic design of intercepting sewer system e. Campus plan of sewerag

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including cable routing, earthling and lighting layout etc. p. Control philosophy, of the whole project system including system architecture for proposed SCADA q. Data sheet for all proposed electrical and instrumentation system r. Control philosophy of surveillance system along with system architecture in master control system s. Services like internal illumination and ventilation, building water supply, sanitation and plumbing, service roads, landscaping, area lighting, etc. t. Master plan for the development with landscaping and master plan of reclaimed area of land u. Any other design and drawings required to complete the project by contractor as described in the Section Employer's Requirements. 4. The applicant's contention is that;- 4.1 The Jaipur Development Authority is covered under the status of Governmental Authority: Definition of Governmental Authority: As per the notification no. 32/2017-Central Tax (Rate) dated 13.10.2017, Government Authority means an authority

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ution. 5. Personal Hearing (PH) In the matter, personal hearing was given to the applicant, Mr. Subhash Sharma (CFO) and Mr. Manmohan Mahipal (CA) appeared as representative of the applicant for personal hearing on 17.08.2018 and reiterated that the case may be decided on the basis of applications Advance Ruling Applications submitted earlier. 6. Issues to be decided : (a) Whether service provided by ws PDCOR Ltd is correctly classified under SAC Code 9983? (b) Whether Jaipur Development Authority falls under the definition of Local Authority or Governmental Authority or Government Entity? (c) Whether the aforementioned services being provided by M/S PDCOR Ltd. in the above case are exempted from Goods and Service Tax under the serial number 3 of CGST Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017, applicable w.e.f 01.07.2017, as amended from time to time and corresponding Raj. GST Notification issued by Government of Rajasthan? (d). Whether the services rendered by P

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portion of tariff entry reads as under:- Name of heading and item Description CGST SGST IGST Condition Heading 9983 (Other professional, technical and business services (i) Selling of space for advertisement in print media. 2.5 2.5 5 – Heading 9983 (Other professional, technical and business services) (ii) Other professional, technical and business services other than (i) above. 9 9 18 – 8.2 (a) As per definitions given under notification No. 12/2017-Central Excise (Rate) dated 28th June 2017 as amended vide notification No. 32/2017- Central tax (rate) dated 13.10.2017, (zo Governmental Authority has the same meaning as assigned to it in the Explanation to clause (16) of Section 2 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017). Explanation as mentioned in clause (16) of Section 2 of the Integrated Goods and Services Tax Act, 2017 is as under:- Government Authority means an authority or a board or any other body Including a Society, Trust, Corporation (i) set up by an A

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c) As per Section 4 of the said Act, the Jaipur Development Authority consists of the following members, namely: – (i) A Chairman, who shall be the Minister-in-charge of Urban Development of the State of Rajasthan, or a nominee of the Governor during President's Rule; (ii) A Vice-Chairman, who shall be the State Minister of Urban Development of the State of Rajasthan, or a nominee of the Governor during President's Rule; (iii) Secretary to the Government, Urban Development and Housing Department; (iv) Jaipur Development Commissioner (appointed under this Act); (v) Chairman, Rajasthan Housing Board; (vi) Chief Engineer, Public Health Engineering Department; (vii) Chief Engineer, Public Works Department; (viii) District Collector, Jaipur; (ix) Chief Engineer, Rajasthan State Electricity Board; (x) Chairman/Administrator, Municipal Council, Jaipur; (xi) Zila Pramukh of Zila Parishad, Jaipur District; (xii) Chief Town Planner, Rajasthan; and (xiii) Non-official members, not exceedi

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Urban Improvement Trust in the State. (f) Further, Order No. RAJ/AAW2018-19/01 Dated 27/04/2018 passed by the Authority for Advance Ruling Rajasthan, Jaipur, has declared JDA as Governmental Authority . As such the JDA is well defined under Governmental Authority in terms of IGST act, 2017. 8.3 The Applicant has sought Advance Ruling as to whether the service provided by them to the JDA is exempted vide entry S.No.3 for Notification No. 12/2017Central Excise (Rate) dated 28th June 2017 which reads as under:- Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution . The Jurisdictional Officer (CGST Division-H, Jaipur) in his comments has stated that the applicant's PMC services to JDA in the project are

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Goods and Services Tax – Seizure of goods – inter-state transit of goods – Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on t

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Goods and Services Tax – Started By: – Harshit Gandhi – Dated:- 24-8-2018 Last Replied Date:- 27-8-2018 – Can we get itc on vehicle hire for pickup drop employee – Reply By Rajagopalan Ranganathan – The Reply = Sir, If you provide the service of pickup and drop of employees free of cost, then the amount spent by you on provision of sudh service will be added to your cost and it can be said the service is used in the course or furtherance of hi your business and you are eligible to avail ITC of gst paid on such service. If you collect the cost of such pickup and drop from the employees then it will be treated as for personal use of your employees and in view of the provision of Section 17 (5) (b) (iii) ITC of gst paid on for availing such s

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Goods and Services Tax – GST – By: – Sandeep Rawat – Dated:- 24-8-2018 Last Replied Date:- 27-8-2018 – Generally speaking, an invoice is a commercial instrument issued by a seller to a buyer. It identifies both the trading parties, and lists, describes, and quantifies the items sold, shows the date of shipment and mode of transport, prices and discounts, if any, and the delivery and payment terms. In certain cases, (especially when it is signed by the seller or seller s agent), an invoice serves as a demand for payment and becomes a document of title when paid in full. Types of invoices include: Invoice under GST Under the GST regime, an invoice or tax invoice means the tax invoice referred to in section 31 of the CGST Act, 2017. This section mandates the issuance of an invoice or a bill of supply for every supply of goods or services. It is not necessary that only a person supplying goods or services needs to issue an invoice. The GST law mandates that any registered person buying go

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nvoice is an important document. It not only evidences the supply of goods or services, but is also an essential document for the recipient to avail Input Tax Credit (ITC). A registered person cannot avail Input Tax Credit unless he is in possession of a tax invoice or a debit note. GST is chargeable at the time of supply. Invoice is an important indicator of the time of supply. Broadly speaking, the time of supply of goods or services is the date of issuance of an invoice or receipt of payment, whichever is earlier. Thus the importance of an invoice under GST cannot be over-emphasised. Suffice it to say, the tax invoice is the primary document evidencing the supply and vital for availing Input Tax Credit. When should a tax invoice or a bill of supply be issued by a registered person Goods The time for issuing an invoice would depend on the nature of supply viz. whether it is a supply of goods or services. A registered person supplying taxable goods shall, before or at the time of remo

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its issue d. Name, address and GSTIN or UIN, if registered, of the recipient e. Name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered and where the value of taxable supply is fifty thousand rupees or more f. HSN code of goods or Accounting Code of Services g. Description of goods or services h. Quantity in case of goods and unit or Unique Quantity Code there of i. Total value of supply of goods or services or both j. Taxable value of supply of goods or services or both, taking into account the discount or abatement, if any k. Rate of tax (Central tax, State tax, Integrated tax, union territory tax or cess) l. Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, union territory tax or cess) m. Place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce n. Address of delivery where the same is differ

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ce but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as prescribed in the Invoice Rules. The Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which: Any other document issued in relation to the supply shall be deemed to be a tax invoice; or Tax invoice may not be issued. Thus, it can be seen that in case of goods, an invoice has to be issued before or at the time of supply. In case of services, however, an invoice has to be issued before or after the provision of services. If the invoice is issued after the provision of service, it has to be done within the specified period of 30 days from the date of supply of service, as per invoice rules. Revised Invoice A registered person may, within one month from the date of issuance of certificate of registration and in such manner as

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pect to any supply of goods or services or both, he has to issue a receipt voucher or any other document, containing such particulars as prescribed in the Invoice Rules, evidencing the receipt of such payment. Where any such receipt voucher is issued, but subsequently no supply is made and no tax invoice is issued, the registered person who has received the advance payment can issue a refund voucher against such payment. A receipt voucher needs to contain the following particulars: Name, address and GSTIN of the supplier A consecutive serial number containing alphabets or numerals or special characters like hyphen or dash and slash symbolised as – and / respectively, and any combination thereof, unique for a financial year Date of its issue Name, address and GSTIN or UIN, if registered, of the recipient Description of goods or services Amount of advance taken Rate of tax (Central tax, State tax, Integrated tax, Union territory tax or cess) Amount of tax charged in respect of taxable go

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e a payment voucher at the time of making payment to the supplier. Invoice in case of continuous supply of goods In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received. Invoice in case of continuous supply of services In case of continuous supply of services, where: The due date of payment is as certainable from the contract, the invoice shall be issued on or before the due date of payment. The due date of payment is not as certainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment. The payment is linked to the completion of an event, the invoice shallbe issued on or before the date of completion of that event. Issue of invoice in case, where supply of service ceases under a contract before the completion of supply In a cas

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ollowing the end of the financial year in which such supply was made or the date of furnishing of the relevant annual return, whichever is earlier. The tax liability of the registered person will be adjusted in accordance with the credit note issued, however no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person. In cases where tax invoice has been issued for a supply and subsequently it is found that the value or tax charged in that invoice is less than what is actually payable/chargeable, the supplier can issue a debit note to the recipient. Any registered person who issues a debit note in relation to a supply of goods or services or both, shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed. A revised tax invoice and credit or debit note

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icate, in case of supply of goods, in the following manner: The original copy being marked as ORIGINAL FOR RECIPIENT The duplicate copy being marked as DUPLICATE FOR TRANSPORTER The triplicate copy being marked as TRIPLICATE FOR SUPPLIER The invoice shall be prepared in duplicate, in case of supply of services, in the following manner: The original copy being marked as ORIGINAL FOR RECIPIENT The duplicate copy being marked as DUPLICATE FOR SUPPLIER The serial number of invoices issued during a tax period shall be furnished electronically through the Common Portal in Form GSTR-1. Tax invoice in Special Cases An ISD invoice or, as the case may be, an ISD credit note issued by an Input Service Distributor shall contain the following details: Name, address and GSTIN of the Input Service Distributor A consecutive serial number containing alphabets or numerals or special characters like hyphen or dash and slash symbolised as , – , / , respectively, and any combination thereof, unique for a f

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e Rules. Where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing the gross weight of the consignment, name of the consignor and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, GSTIN of the person liable for paying tax whether as consignor, consignee or goods transport agency, and also containing other information as prescribed under rule 1 of Invoice Rules. Where the supplier of taxable service is supplying passenger transportation service, a tax invoice shall include ticket in any form, by whatever name called, whether or not serially numbered, and whether or not containing the address of the recipient of service but containing other information as prescribed

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re the transportation is for supply to the consignee Place of supply, in case of inter-State movement Signature The delivery challan shall be prepared in triplicate, in case of supply of goods, in the following manner: The original copy being marked as ORIGINAL FOR CONSIGNEE The duplicate copy being marked as DUPLICATE FOR TRANSPORTER The triplicate copy being marked as TRIPLICATE FOR CONSIGNER Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in FORM [WAYBILL]. Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after the delivery of goods. Where the goods are being transported in a semi knocked down or completely knocked down condition: The supplier shall issue the complete invoice before dispatch of the first consignment The supplier shall issue a delivery challan fo

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Goods and Services Tax – 56/30/2018 – Dated:- 24-8-2018 – Circular No. 56/30/2018-GST F. No. 354/290/2018-TRU Government of India Ministry of Finance Department of Revenue Tax Research Unit North Block, New Delhi 24th August, 2018 To, The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) / The Principal Director Generals/ Director Generals (All) Madam/Sir, Subject: Clarification regarding removal of restriction of refund of accumulated ITC on fabrics – reg. Certain doubts have been raised regarding the applicability and intent of notification No. 20/2018-Central Tax (Rate) dated 26th July, 2018 (which seeks to amend notification No. 5/2017-Central Tax (Rate) dated 28.06.2017) relating to the provision for lapsing of input tax credit accumulated on account of inverted duty structure on fabrics for the period upto the 31st July, 2018. 2. The said notification No. 5/2017-Central Tax (Rate) was issued in exercise of powers vested

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f warp without weft assembled by means of an adhesive 7. 60 Knitted or crocheted fabrics [All goods] *Inserted in the month of Sep 17, # Inserted in the month of Nov 17. 3. In the 28th GST Council meeting, it was decided to remove the restriction of not allowing refund of ITC accumulated on account of inverted duty structure on fabrics with prospective effect on the input supplies received after the date of issue of notification. It was also decided to simultaneously lapse the accumulated ITC, lying unutilised, for the past period, after the payment of GST for the month of July, 2018. Accordingly, to give effect to this decision, the notification No. 20/2018-Central Tax (Rate) has been issued amending notification No. 5/2017-Central Tax(Rate). To keep the accounting simple, it was decided to make these changes effective from the 1st day of August, 2018. 4. Vide the said notification No. 20/2018-Central Tax (Rate), the following proviso has been inserted in notification No. 5/2017-Centr

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respect of exports shall also be made to lapse? 6. The matter has been examined. Section 54 of the CGST Act, 2017 provides for refund of accumulated credit on inputs on account of inverted duty structure, i.e., GST rate on inputs being higher than the GST rates on finished goods. However, proviso (ii) to section 54 (3) provides that in respect of notified goods, the refund of such accumulated input tax credit shall not be allowed. Notification No. 5/2017-Central Tax (Rate) has been issued in terms of this provision and it interalia prescribes that refund of accumulated ITC on account of inverted duty structure shall not be allowed in respect of fabrics as mentioned in para 2. Therefore, the restriction of refund of accumulated ITC under notification No. 5/2017-Central Tax (rate) dated 28.06.2017 is applicable only in respect of refund of accumulated ITC on inputs. This notification does not put any restriction in relation to the ITC on input services and capital goods. 7. The proviso h

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tion No. 5/2017-Central Tax (Rate) does not put any restriction in respect of ITC on input services and capital goods, therefore the proviso now inserted in the said notification No. 5/2017-Central Tax (Rate) vide notification No. 20/2018 does not affect the ITC availed on input services and capital goods. 9. As regards, the legislative power of providing for lapsing of input tax credit, the same flows inherently from the power to deny refund of accumulated ITC on account of inverted structure. 10. Doubts have also been raised as regards the manner of calculating the ITC amount accumulated on account of inverted duty structure on the inputs of said fabrics that would lapse on account of above stated change. It is clarified that for determination of such amount, the formula as prescribed in rule 89 (5) of the CGST rules shall mutatis mutandis apply as it applies for determination of refundable amount for inverted duty structure. Such amount shall be determined for the months from July,

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on account of inverted duty structure during the said period. If ITC balance lying unutilized with him is more than this amount, say ₹ 10 lakh, the ITC equal to ₹ 5 lakh will only lapse. However, if for any reason, the ITC balance lying unutilized is less than ₹ 5 lakh, say ₹ 3 lakh, the ITC equal to ₹ 3 lakh will lapse. (2) A manufacture who produces, say, grey manmade fibre fabrics and cotton fabrics, had a turnover of ₹ 5 crore and 2 crore respectively for manmade fabrics and cotton fabrics for the months from July, 2017 to July 2018 [or for the relevant period for fabrics on which refund was blocked subsequently by inserting entries in notification No. 5/2017-Central Tax (Rate)]. Tax payable thereon is ₹ 25 lakh on MMF fabrics and ₹ 10 lakh on cotton fabrics. MMF fabric has inverted duty structure while cotton fabric does not have inverted duty structure. Assuming the net ITC availed on inputs, during this period, was ₹ 35 lakh,

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dit that has been accumulated on inputs on account of inverted duty structure. Therefore, in case a manufacturer, whose accumulated ITC is liable to lapse in terms of said notification, has certain stock lying in balance as on 31.7.2018, the input tax credit involved in inputs contained in such stock ( including inputs lying as such) may be excluded for determination of Net ITC for the purposes of applying the said formula. For this purpose, the ITC relating to inputs contained in stock may be determined in the manner as provided in S. No. 7 of Form GST ITC-01. 12. As regards the applicability of said proviso to cotton, silk and other natural fibre fabrics, which do not suffer inverted duty structure, this is clarified that the said condition of lapsing of ITC would apply only if input tax credit on inputs has been accumulated on account of inverted duty structure. The aforesaid formula takes care of this aspect. 13. As regards accumulated ITC in relation to exports, the refund of such

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Goods and Services Tax – 36/2018 – Dated:- 24-8-2018 – Government of India Ministry of Finance (Department of Revenue) [Central Board of Indirect Taxes and Customs] Notification No. 36/2018 – Central Tax New Delhi, the 24th August, 2018 G.S.R. 801 (E).- In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017, the Central Government, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 34/2018- Central Tax, dated the 10th August, 2018, published in the Gazette of India, E

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Goods and Services Tax – 37/2018 – Dated:- 24-8-2018 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 37/2018 – Central Tax New Delhi, the 24th August, 2018 G.S.R. 802 (E).- In exercise of the powers conferred by the second proviso to sub-section (1) of section 37 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) the Commissioner hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 32/2018- Central Tax, dated the 10th August, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R.759(E), dat

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Goods and Services Tax – 38/2018 – Dated:- 24-8-2018 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 38/2018 – Central Tax New Delhi, the 24th August, 2018 G.S.R. 803 (E).- In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 33/2018- Central Tax, dated the 10th August, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R.760(E), dated the 10th August, 2018, namely:- In the first paragra

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2018 (8) TMI 1390 – CESTAT ALLAHABAD – TMI – Clandestine removal – shortages of goods – The entire case of the Revenue is based upon the not so confessional statement of Shri Jagdish Prasad – Held that:- Apart from the fact that the statement of Shri Jagdish Prasad was not confessional, we observe that even if the said statement is held to be confessional statement accepting clandestine removals the same cannot be made the sole basis for upholding the allegations of clandestine activity of the appellant. The deponent of the said statement was never put to Examination-in-Chief or cross examination and as such veracity of his statement has never been tested. Otherwise also it is well settled law that clandestine removal allegations cannot be upheld on the basis of the sole statement of one of the employees, unless the same are corroborated by other independent evidences.
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The Hon’ble Allahabad High Court in the case of Continental Cement Company V/s Union of India [2014 (9) TMI 243

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de, the penalties imposed upon the appellant is also required to be set aside.
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Appeal allowed – decided in favor of appellant. – Appeal No. E/70513/2018-EX[DB] – Final Order No. 72001/2018 – Dated:- 24-8-2018 – Hon ble Mrs. Archana Wadhwa, Member ( Judicial ) And Hon ble Mr. Anil G. Shakkarwar, Member ( Technical ) Shri Rajesh Chhibber ( Adv ) for Appellant Shri Sandeep Kumar Singh, Deputy Commissioner ( AR ), for Respondent ORDER Per: Archana Wadhwa After hearing both the sides duly represented by Shri Rajesh Chhibber for appellant and Shri Sandeep Kumar Singh, A.R. for Revenue, we find that the appellant s factory, who is engaged in the manufacture of Aluminium Profiles (hollow) of various sizes and specifications, was visited by the Central Excise Officers on 14.05.2015, who conducted various checks and verifications. It was found that Daily Stock Register (RG-1) was written only up to 30.04.2015. On being questioned, Shri Jagdish Prasad, Authorised Signatory, informed the off

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ht rupees). Statement of Shri Jagdish Prasad, Authorised Signatory was recorded wherein he deposed that entries in the note book appears to have been made by the packing and dispatch staff of his company and related to the details of material packed along with details of dispatch of the material and the figures reflected against the entries T.B.L. denotes the total balance quantity available on a particular date after dispatch and the figures reflected against the entries T. Dispatch denotes the total dispatch quantity up to the date of particular month. Further, on being confronted with certain loose papers resumed by the officers, he deposed that the entries therein were entries by the dispatch staff of his company. On further pointing out to certain print out of loose papers, he submitted that some quantity might have been cleared by them without invoices and without payment of Central Excise duty. 2. On the above basis proceedings were initiated against the appellant proposing conf

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r day to day work of the Company and were responsible for the functioning. As such by referring to various decisions he observed that the non-confessional statement of Shri Jagdish Prasad cannot be made the sole basis for upholding the allegations of clandestine removal unless such allegations are proved by the Revenue with corroborative, independent, cogent and concrete evidences. Accordingly, he vacated the show cause notice by observing as under:- On an overall view, I find that the case has been made out only on the basis of the statement recorded of Sh. Jagdish Prasad, Authorised Signatory of the unit and no other evidence in the form of raw material, payment received for clandestine removal of goods, how the goods were transported has been brought on record by the Authorities or the investigation team, therefore, relying on the said decision cited herein above I find that the charge of clandestine removal is not proved in the absence of any corroborative evidences to the statemen

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at such contentions of the assessee is deprived of any merit as it was always open to him at the time of the proceedings to deny that the said papers did not belong to the unit or were not made by his staff of the unit. As such he observed that based upon the statement of Shri Jagdish Prasad, Authorised Signatory, it has to be held that assessee has indulged in clandestine removal. Accordingly, he set aside the Order of the Original Adjudicating Authority and confirmed the demand of ₹ 5,60,088/-in respect of shortages detected in the stock of finished goods and of ₹ 64,64,608/- in respect of clandestinely manufactured and cleared finished goods along with confirmation of interest. He also imposed penalty of ₹ 70,24,696/- on the appellants under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11(AC) of the Central Excise Act along with imposition of penalty of ₹ 1,00,000/- in terms of Rule 26 in the Central Excise Rules. The said order of Commissio

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iting of dispatch and packing staff. Revenue has made no further efforts to get in touch with the said dispatch and packing staff or to find out who actually is the writer of the entries in the note pad. No enquiry stand made even from the Directors or from any other person/staff of the assessee. The entire case of the Revenue is based upon the not so confessional statement of Shri Jagdish Prasad. Apart from the fact that the statement of Shri Jagdish Prasad was not confessional, we observe that even if the said statement is held to be confessional statement accepting clandestine removals the same cannot be made the sole basis for upholding the allegations of clandestine activity of the appellant. The deponent of the said statement was never put to Examination-in-Chief or cross examination and as such veracity of his statement has never been tested. Otherwise also it is well settled law that clandestine removal allegations cannot be upheld on the basis of the sole statement of one of t

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e Revenue upon whom the burden is cast heavily. To the same effect is the Tribunal s decision in the case of Commissioner of Central Excise, Ludhiana V/s Raj Lakshmi Dyeing & Printing Mills reported as 2014 (312) E.L.T. 379 (Tri.-Del.) as also in the case of Commissioner of Central Excise, Ludhiana V/s Renny Steel Castings (P) LTD. reported as 2011 (274) E.L.T. 94 (Tri.-Del.), as confirmed by the Hon ble Punjab & Haryana High Court reported as Commissioner of Central Excise, Ludhiana V/s Renny Steel Castings (P) Ltd. reported as 2013 (288) E.L.T. 45 (P & H). In view of the forgoing we find that the Revenue has failed to produce any evidence to establish clandestine removal on the part of the appellant. The Order of Commissioner (Appeals) lacks merits and is accordingly set aside and the order of the Original Adjudicating Authority is restored. 5. Similarly in respect of the shortages, it is well settled that mere shortages cannot lead to the allegation of clandestine remova

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GST – States – 77/GST-2 – Dated:- 24-8-2018 – HARYANA GOVERNMENT EXCISE AND TAXATION DEPARTMENT Notification The 24th August, 2018 No.77/GST-2.- In exercise of the powers conferred by section 168 of the Haryana Goods and Services Tax Act, 2017 (19 of 2017 read with sub-rule (5) of rule 61 of the Haryana Goods and Services Tax Rules, 2017, the Commissioner of State Tax, on the recommendations of the Council, hereby makes the following amendment in the Haryana Government, Excise and Taxation Depa

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GST – States – 34/2018-State Tax – Dated:- 24-8-2018 – No.J.21011/2(i)/2018-TAX GOVERNMENT OF MIZORAM TAXATION DEPARTMENT …. NOTIFICATION No.34/2018-State Tax Dated Aizawl the 24th August, 2018 In exercise of the powers conferred by section 168 of the Mizoram Goods and Services Tax Act, 2017 (6 of 2017) (hereafter in this notification referred to as the said Act) read with sub-rule (5) of rule 61 of the Mizoram Goods and Services Tax Rules, 2017 (hereafter in this notification referred t

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GST – States – 33/2018-State Tax – Dated:- 24-8-2018 – No.J.21011/2/2018-TAX GOVERNMENT OF MIZORAM TAXATION DEPARTMENT …. NOTIFICATION No. 33/2018-State Tax Dated Aizawl the 24th August, 2018 In exercise of the powers conferred by section 148 of the Mizoram Goods and Services Tax Act, 2017 (6 of 2017) (hereafter in this notification referred to as the said Act), the Governor of Mizoram, on the recommendations of the Council, hereby notifies the registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year, as the class of registered persons who shall follow the special procedure as mentioned below for furnishing the details of outward supply of goods or services

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2018 (9) TMI 314 – CESTAT MUMBAI – TMI – Waiver of penalty u/s 76 and 78 – case of Revenue is that Commissioner (Appeals) has appropriated the Service Tax and interest paid by the assessee, but has failed to appreciate the fact that it was only on the basis of observation of Audit that non-payment of Service Tax came to light – Held that:- The respondent did not pay the Service Tax even after the decision of Hon'ble High Court of Bombay in the case of Indian National Ship Owners' Association [2009 (3) TMI 29 – BOMBAY HIGH COURT], and it was only when the Audit pointed out in July, 2012, the respondent paid the Service Tax – invocation of Section 76 is justified.
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Penalty u/s 76 justified – appeal allowed in part. – Appeal No. ST/86956

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that had Audit not detected the same, respondent would have gone scot free. In these circumstances, penalty under Section 78 should been confirmed. He pointed out that Section 80 has been invoked to set aside penalty imposed under Section 76 of the Finance Act, 1994. He argued that there has been doubt on part of the respondent to pay Service Tax on reverse charge basis. He pointed out that period of demand is from 2006 to 2011. He pointed out that after the decision of Hon'ble High Court of Bombay in the case of Indian National Ship Owners' Association – 2009 (14) STR 289 (Bom), the matter had become very clear that the respondent is required to pay Service Tax. In these circumstances, the respondent's failure to pay Service Ta

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vailed the CENVAT Credit of the Service Tax paid by them and therefore, there could not have been any intention to evade payment of duty and therefore, invocation of Section 78 of the Finance Act, 1994 has rightly been set aside by the Commissioner. 4.1 However, I find that after the decision of Hon ble High Court of Bombay in the case of Indian National Ship Owners' Association (supra), liability to pay Service Tax is crystal clear w.e.f. date of judgment i.e. 23.3.2009. The respondent, however, did not pay the Service Tax even after the decision of Hon'ble High Court of Bombay and it was only when the Audit pointed out in July, 2012, the respondent paid the Service Tax. In these circumstances, invocation of Section 76 is justified

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2018 (9) TMI 388 – CESTAT CHANDIGARH – TMI – Refund Claim – whether the appellant have locus standi to file refund claim or not? – service tax deducted and deposited by the Housing Board on behalf of the appellant (service provider) – Held that:- This issue is already settled by the judgment of the Hon’ble Supreme Court in the case of Oswal Chemicals & Fertilizers Ltd. [2015 (4) TMI 352 – SUPREME COURT], where it was held that the appellant who had paid the excise duty to the manufacturer, viz., M/s. Indian Oil Corporation Ltd. and BPCL in the instant case, had the necessary locus standi to file the application claiming the refund of the duty – It was further held in the case that Explanation (B) defines “relevant date”. Though this date has reference to the calculation of limitation period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the “relevant date” clarifies that in case of a person, other than the manufacturer,

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e dt.30.1.2018 issued in favor of the appellant issued by the Housing Board Haryana and to pass a fresh order in accordance with law – appeal allowed by way of remand. – Appeal No. ST/60725/2018-ST – Final Order No. 62857/2018 – Dated:- 24-8-2018 – Hon ble Mr.Devender Singh, Member ( Technical ) For the Appellant : Shri Vikash Bansal, CA For the Respondent : Shri G.M.Sharma, AR ORDER Per : Devender Singh The facts of the case are that the appellant were awarded three works contracts by Housing Board, Haryana (HBH) for construction of flats for BPL category in Housing Board Colony, at different locations. The HBH deducted service tax @ 2.472 % (50% of the applicable rate) approximately amounting to ₹ 87.36 Lacs from running bills of the appellants on the amount of gross work executed by them after 01.07.2012. Aggrieved by the action of HBH, the appellants filed writ petition vide CWP No.12304 of 2015 before Hon ble Punjab & Haryana High Court where the High Court vide Order da

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und/B.B.Gupta/72/PKL/16-17/1181 dated 18.05.2017 returned the refund application along with supporting documents stating as under:- Since M/s. Bharat Bhushan Gupta & Company is not registered with this office and no record/details of the party is available with this office, therefore, this office is unable to process the refund claim. Secondly, you are also not a service receiver in respect of any services provided by any of the assessees in this jurisdiction. So, in any view provisions of Section 11B of Central Excise Act, 1944, as made applicable to Service Tax, you are not eligible for refund from this office. 2. Aggrieved from the letter dt.18.05.2017 issued by Assistant Commissioner, Central Excise Division, Panchkula, the appellant filed the appeal before the Commissioner (Appeals). However, their appeal was rejected on the ground that the appellant had no locus standi to file refund claim as service tax has been paid by the Housing Board Haryana. Second ground of rejection w

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and Haryana in the case of Bharat Bhushan Gupta & Co. vs. State of Haryana and others in its judgment dt.11.8.2018 held that no service tax was leviable on reverse charge basis by the Housing Board Haryana and direction of Housing Board in deducting part of Service Tax was declared to be illegal. He submits that as the service tax has been deducted illegally by the Housing Board Haryana and deposited with the Service Tax Department, they were eligible to file refund claim. In this regard, he relied on the judgment of the Hon ble Supreme Court in the case of Oswal Chemicals & Fertilizers Ltd. in its judgment dt.30.3.2015 in Civil Appeal No.2807 of 2004. He also submits that the Housing Board Haryana had issued disclaimer certificate dt.30.1.2018 in which the Housing Board Haryana has given its no objection to refund of service tax to the appellant and has stated that Housing Board will not make any claim for this amount at any time. Ld. CA submits that based on disclaimer certif

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in the Hon ble Supreme Court has held as below:- 5.Insofar as dismissing the application on the ground that the appellant did not have locus standi, we find that view taken by the authorities below is clearly erroneous in law. Section 11B of the Act which contains the provision for making a claim for refund of duty uses the expression any person who is eligible to claim refund of the duty. The relevant portion of Section 11B reads as under : Section 11B. Claim for refund of duty. – (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collecte

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the reading of clause (e) to Explanation (B) appended to the aforesaid provision which is as under : Explanation. – For the purposes of this section, – …………………………. ………………………. (B) relevant date means, – …………………………………. …………………………………. in the case of a person, other than the manufacturer, the (e) date of purchase of the goods by such person; ……………………………………. 7.Explanation (B) defines relevant date . Though this date has reference to the calculation of limitation period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the relevant date clarifie

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he manufacturer, viz., M/s. Indian Oil Corporation Ltd. (hereinafter referred to as 'IOCL') and BPCL in the instant case, had the necessary locus standi to file the application claiming the refund of the duty." 7. In view of the above judgment of Hon ble Supreme Court, I hold that the appellant have locus standi to file refund claim in this case. I also find that the department has entertained the refund claim of another similarly placed contractor, as is evident from the Order-in-Appeal No.Appl/PKL/ST/32/2017-18 dt.22.2.2018 of the Commissioner (Appeals) in the case of Satish Kumar Gupta, Contractor. Hence, the rejection of plea of appellant on this ground by Commissioner (Appeals) is untenable. 8. The second issue pertains to merits of the case where HBH has given the disclaimer certificate. I find that the appellant have placed on record disclaimer certificate dt.30.1.2018 from the Housing Board Haryana in respect of their claim. The order of the Commissioner (Appeals)

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