Goods and Services Tax – Withdrawal of Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 and Order No 02/2018–Central Tax dated 31.03.2018 – reg. – TMI Updates – Highlights
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Goods and Services Tax – Started By: – ASWIN HARIDAS – Dated:- 1-8-2018 Last Replied Date:- 6-8-2018 – WHAT WOULD BE THE DUTIES TO BE PERFORMED BY A REGISTERED JOB WORKER WHEN RECEIVES A WORK ORDERAND DOCUMENTS TO BE ISSUED BY THEM, WHAT IS THEIR ROLE IN GST – Reply By Alkesh Jani – The Reply = Sir,The flier issued by CBIC will be helpful to you. The link is given below:-http://www.cbic.gov.in/resources//htdocs-cbec/gst/Job_Work.pdf;jsessionid=DF46B7E0DC4A5488988BDD632A2AD2CDFurther, for better
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Goods and Services Tax – Started By: – Vineet Kt – Dated:- 1-8-2018 Last Replied Date:- 28-8-2018 – Sir,I am employee of a bank and had availed furniture reimbursement facility from the Bank. Now I have resigned and the bank is charging gst on the wdv of the household items so that the ownership can be transferred in my name. Please clarify if gst is applicable or not. No ITC was claimed as the items were purchased in the pre-gst regime(vat). – Reply By Alkesh Jani – The Reply = Sir, Although No ITC was taken, GST is applicable on transaction value.Thanks – Reply By Ganeshan Kalyani – The Reply = GST will be charged / collected from you by the Bank and pay to the government. The tax can be inclusive of the price or exclusive. It depends up
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my view if you bank had taken credit in past then the gst payable in only on the differential value. – Reply By Vineet Kt – The Reply = Thanks Sir. Understood now. – Reply By Ganeshan Kalyani – The Reply = Welcome Sir. – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = Nice explanation by Shri Ganeshan – Reply By Ganeshan Kalyani – The Reply = Thank you Sir. – Reply By Ramaswamy S – The Reply = At the time of purchase of asset, the asset was in the name of the employer and the depreciation was claimed by the employer. The value of the asset was treated as perks in the hands of the employee and IT was charged.At the time of transfer of asset (pre GST), VAT is charged on the value of the asset transferred. Under GST, instead of VAT, CGST+SGST
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Goods and Services Tax – GST – Dated:- 1-8-2018 – The Total Gross GST Revenue collected in the month of July 2018 is ₹ 96,483 crore of which CGST is ₹ 15,877 crore, SGST is ₹ 22,293 crore, IGST is ₹ 49,951 crore (including ₹ 24,852 crore collected on imports) and Cess is ₹ 8,362 crore (including ₹ 794 crore collected on imports). This is broadly on expected lines. The total number of GSTR 3B Returns filed for the month of July up to 31st July, 2018 is 6
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Goods and Services Tax – Started By: – MURAGAIAH MELANGI – Dated:- 1-8-2018 Last Replied Date:- 5-8-2018 – Dear All,i have one more query regarding applicability of GST, we are registered Company in Hyderabad, our corporate office at Spain, every month we are doing BIM Design works / Drafting works, the reports will deliver by an email and Server to Spain Office, monthly hourly basis we will Invoice it in Euros to our Corporate Office (Spain), after 2 months they will credit to our Bank, the bankers will converted in to INR, However so far we are filing GST Monthly Returns, these sales we are showing Export Services and no GST payment. Please let me understand why this is not taxable? GST not Charged? What is LUT?Thanks!MURAGAIAH MELANGI90
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Goods and Services Tax – Started By: – MURAGAIAH MELANGI – Dated:- 1-8-2018 Last Replied Date:- 1-8-2018 – Dear All,i have one query regarding GST, we have our corporate office at Spain, their subsidery Company registered at Hyderabad (Telangana), we have provided the services to Dr. Reddy Labs plant at Vizag (another State – AP) on the instructions of our Corporate office at Spain, my Spain will Invoice to DRL, Hyderabad office will Invoice to our Corporate office at Spain, What are the Tax implications ?Please give proper reply against this query.Thanks & RegardsMURAGAIAH MELANGI9000181579 – Reply By KASTURI SETHI – The Reply = Service has been consumed in India.It is inter-State supply. IGST is applicable. – Reply By Alkesh Jani – T
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rvice in convertible foreign exchange; and(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;Explanation 1.-For the purposes of this Act, where a person has,-(i) an establishment in India and any other establishment outside India;(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or(iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons .Further, In terms of Para 2 of Schedule-I which reads as un
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Goods and Services Tax – GST – By: – Bimal jain – Dated:- 1-8-2018 – Key 15 suggestions on simplifying GST for SME / MSME sector Ahead of GST Council meeting on August 4, which would exclusively focus on the issues / hardships faced by MSME, CBIC is collating grievances/issues related to GST and suggestions thereof for mitigating such issues for MSME taxpayers. Following suggestions were compiled by Mr. Bimal Jain, Chairman, Indirect Tax Committee, PHD Chamber of Commerce towards making GST Law as Good and Simple Tax for SME/ MSME sector forming heart of Indian Economy, which have been submitted to the Government for their kind consideration: I Definition of Aggregate Turnover for taking registration in GST Definition of aggregate turnover as per Section 2(6) of the CGST Act, 2017 ( CGST Act ) inter alia, means aggregate value of all taxable supplies, exempt supplies, exports and inter-state supplies of persons having the same Permanent Account Number, to be computed on all India basi
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ted in Schedule II (as supply of service or supply of goods) shall be taxed only when they constitute supply in accordance with provisions of Section 7(1)(a), (b) and (c) of the CGST Act, 2017. Suggestion(s): Removing subjectivity and inclusivity in definition of supply – The definition of term Supply starts with Supply includes is too wider a definition and with subjectivity, followed by inclusive definition. As this is taxable event in GST, it must be defined concretely so as to avoid any disputes & litigation, as we have past history for the term Manufacture for the chargeability of Central Excise Duty. Further, Section 2(30) of the CGST Act defines Composite supply as a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Suggestion(s): Clarif
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s – Like manufacturers, traders and restaurant service providers, benefit of composition scheme must be extended to other service providers also. Providing some ceiling for inter-state outward supplies of goods by a composition supplier – Presently, a person opting for composition scheme is not allowed to make any inter-state outward supply of goods. This is creating a bottle neck for small sector. It is suggested here also that certain percentage of turnover may be allowed for inter-state supply of goods for the benefit of SME/MSME sector in true sense. No hefty penalties – Penalties in respect of wrongly opted composition scheme, cancellation of registration, etc., must be limited to recovery of differential taxes only without levying hefty penalties / interest considering that the tax payer under a composition scheme would be a small player. IV Reverse Charge under Section 9(4) of the CGST Act to be removed completely GST Council has proposed to defer existing Section 9(4) of the CG
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her, as per 2(5) of the CGST Act, agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another . Suggestion(s): Clarification to the effect that Compulsory Registration for agents is restricted to only consignment agents – Though definition of agent under Section 2(5) as well as clause (vii) of Section 24 covers only those persons who supply taxable goods on behalf of another i.e. consignment agents, but debate is going on as to whether the commission agents or brokers who merely facilitate a transaction between two parties like procuring orders etc. are also debarred from the benefit of threshold limits of registration i.e. ₹ 20 Lac. It is suggested to issue a suitable clarification in this regard. VI Input Tax Credit ( ITC ) viz-a-viz registration In terms of Rule 10(3) of the
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f grant of registration as no ITC is made available on procurements made during such period. Further, ITC is also denied for stock held on the day immediately preceding the date of liability to register. It is recommended that alternate mechanism may be developed for genuine cases and registration may be granted with effect from the date of liability if proved bonafide. Further, credit of stock as on date of liability to register must also be allowed in bonafide cases. VII E-Way Bill Section 129 of CGST Act validates detention and seizure of goods/conveyance and consequently levying penalty as high as 100% of tax payable along with tax payable for any contravention of provisions of GST Act and Rules made thereunder irrespective of there being any intent to evade taxes or not. Wide powers conferred under this provision is causing harassment of taxpayers specially when there is some error or incomplete details in E-Way Bill. Recently Madhya Pradesh HC in the case of Gati Kintetsu Express
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asis for small taxpayers. VIII HSN wise summary – GSTR-1 Notification No. 12/2017 – Central Tax dated June 28, 2017 provides that a registered person whose annual turnover in the preceding financial year is less than ₹ 1 .5 crores is not required to mention the digits of HSN codes in a tax invoice issued by him. However, in GSTR-1, every assessee is required to give the details of stock sold HSN code wise. Further, such small tax payers are required to mention 4-digit HSN Code for generation of E-way Bill for movement of goods, having consignment value more than ₹ 50,000/-. These divergent provisions and procedures are creating obstacles towards ease of business for SME/ MSME Sectors. Suggestion(s): System of uniformity and synchronization to be adhered for brining simplicity and ease of business. It is suggested that an alternative way of reporting rate-wise supplies be established in new formats of returns to give relief to small traders who are otherwise not required to
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the maximum amount to be deposited to file appeal from the appellate authority to appellate tribunal is 20% of the disputed tax amount along with the amount deposited u/s 107(6) subject to maximum of ₹ 50 crores. Suggestion(s): Maximum ceiling should be 10 crores – Under Excise and Service tax, pre-deposit @ 7.5% of tax in dispute at first level and 2.5% at second level was applicable subject to maximum of ₹ 10 Crores. Keeping such high pre-deposit amount of 10%/20% with maximum ceiling as high as ₹ 25 crores/ 50 crores will cause undue hardship on innocent assesses having genuine case and not easing business for SME/ MSME Sectors. It is suggested that, pre-deposit amount under GST also should be 7.5% at first level of appeal and 2.5% at second level, totalling together 10% of disputed tax amount subject to maximum of ₹ 10 Crores. XI IGST credit on imports of finished goods affecting Make in India drive Prior to implementation of GST, while traders were only all
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ting the same from China as the effective duty on imports has reduced by around 16%. The Pre-GST & Post-GST duty structure is as under: Pre-GST Post-GST Basic Duty 10% 10% Countervailing Duty 12.5% Special Additional Duty 4% IGST 12% As imports of finished goods have become cheaper on par credit available to both manufacturer/ Trader, the domestic manufacturers are closing their operations and impacting adversely towards Make in India drive & there is loss of jobs in small scale units. Suggestion(s): IGST credit to be restricted only on import of raw materials – Manufacturers of India must be boosted in comparison to their position with traders of imported finished goods. IGST credit on imports should be restricted only to the manufacturer of imported raw materials. Import of Finished goods must not be allowed par benefit of credit of IGST to the trader of imported finished goods. This will make the position of manufacturers wiser and encouraging as compared to importers. This
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claim for refund of ITC arises, which is presently the end of the financial year. Suggestion(s): Facility on GSTN portal should be enabled to allow monthly and/ or quarterly refund – As of now Form RFD – 01A allows only monthly claim of refunds. Thus, proper GSTN functionality must be ensured for proper execution of proposed change. Removing anomaly of no refund on unutilized ITC on capital goods as against Rebate Mechanism of export made on payment of IGST – The CGST Rules do not allow refund of ITC on capital goods when zero-rated supplies are made against LUT without payment of IGST, but in case of supplies made on payment of IGST, refund of ITC on capital goods is allowed. It is suggested that such anomaly must be removed for creating par situations for both rebate and refund mechanisms. XIV Input Tax Credit – Value of exempt supply for reversal of ITC In GST amendments, it is proposed that no reversal of common ITC shall be required on activities or transactions specified in Sche
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Audit Section 35(5) of CGST Act provides that every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant. In this regard, Rule 80(3) of the CGST Rules states that every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C. Suggestion(s): Two crores limit must be computed per registration wise – Anomaly of word turnover in Section 35(5) viz-a-viz word aggregate turnover in Rule 80(3) be removed. Further, clarity must be provided that two crores limit for GST audit shall be determined per State wise turnover rather than taking aggregate turnover on PAN India basis of an assessee. Considering aggregate turnover of an assessee will create a situat
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 1-8-2018 – Goods and Services Tax (GST), introduced from July 1, 2017 is more than one year old now but has resulted in operational and implementation disruptions affecting all stakeholders. GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council his however, making regular changes to fix the anomalies and hardships faced by taxpayers. Taxpayers have already challenged various provisions of GST laws and rules framed thereunder with about 200 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme cour
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and Services Tax Act as also Kerala State Goods and Services Tax Act, said authority was directed to complete adjudication provided for under section 129 within a week and release goods, if assessee complies with rule 140(1) of Kerala State Goods and Services Tax Rules. In New Shiva Transport Service v. State of U.P 2018 (6) TMI 425 – ALLAHABAD HIGH COURT, where Competent Authority had seized goods of assessee under transport as well as vehicle on account of non filing of Part-B of E-way bill, said authority was directed to release goods and vehicle on assessee furnishing security other than cash or bank guarantee equivalent to proposed tax. In Shri Ram Tiles & Sanitary Ware v. Union of India 2018 (6) TMI 110 – PUNJAB AND HARYANA HIGH C
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n assessee a notice. Assessee filed writ petition seeking appropriate directions to Competent Authority to complete adjudication provided for under section 129 in respect of goods detained, said authority was directed to complete adjudication within two weeks. In J.V.D. Cera Coating and Colours (P.) Ltd. v. State of U.P 2018 (5) TMI 1703 – ALLAHABAD HIGH COURT , where Competent Authority, exercising under section 67(2) of U.P. GST Act, had conducted search on assessee and seized goods and thereafter passed an order under section 67(6) directing assessee to deposit tax and penalty to extent of ₹ 9.53 lakhs, said authority was directed to release goods on assessee depositing ₹ 3 lakhs and furnishing security for balance amount. In
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2018 (8) TMI 212 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL – 2018 (15) G. S. T. L. 593 (A. A. R. – GST) – Levy of GST – supply of goods or services to SEZ unit or SEZ developer – IGST Act – Whether or not the supply of goods and on-site services to customers in SEZ area to any SEZ unit or SEZ developer is zero rated supply under section 16 of the Integrated Goods & Services Tax Act, 2017? – whether GST is chargeable for the supply of goods or services to SEZ unit or SEZ developer?
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Held that:- Section 16 of IGST Act deals with “zero rated supply” which includes the supply of goods and services or both to a Special Economic Zone Unit or a Special Economic Zone Developer – Since the Applicant supplies to units and developers of Speci
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nce Ruling. For The Applicant : Sri T P Kar, FCA RULING 1. The Applicant, stated to be a dealer of Cummins India Limited functioning mainly in the trading of diesel engines and its spare parts along with services of diesel engine, either on AMC basis or on an as and when required basis, is seeking a ruling on whether or not the supply of goods and on-site services to customers in SEZ area to any SEZ unit or SEZ developer is zero rated supply under section 16 of the Integrated Goods & Services Tax Act, 2017, and whether GST is chargeable for the supply of goods or services to SEZ unit or SEZ developer. Although the questions raised in the Application touch upon certain provisions of the IGST Act and supplies to SEZ units or SEZ developer
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sel engine, either on AMC basis or on an as and when required basis to various companies like Cresmac Foundry Pvt Ltd, Websol Energy Systems Limited, Vikram Solar Pvt Ltd (Fab-II), International Conveyors Limited, Patton International Limited, Best Safety Pvt Limited, all SEZ (Special Economic Zone) Units Falta Special Economic Zone, Candor Tech Space in Rajarhat, Newtown, Kolkata Special Economic Zone. During Hearing, legal representative of the Applicant has emphasised that supplies are made only to units and entities located in Special Economic Zones. 3. Section 16 of IGST Act deals with zero rated supply which includes the supply of goods and services or both to a Special Economic Zone Unit or a Special Economic Zone Developer. 4. Since
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M/s. QUALITY TRADERS Versus ASSISTANT STATE TAX OFFICER, STATE GOODS AND SERVICES TAX DEPARTMENT, ALUVA, STATE TAX OFFICER, STATE GOODS & SERVICE TAX DEPARTMENT, COCHIN, COMMISSIONER OF STATE TAX, KERALA STATE GOODS & SERVICE TAX DEPARTMENT, THIRUVANANTHAPURAM STATE OF KERALA, TAXES DEPARTMENT, STATE GOODS & SERVICE TAX DEPARTMENT, CENTRAL BOARD OF EXCISE AND CUSTOMS, NEW DELHI – 2018 (8) TMI 391 – KERALA HIGH COURT – TMI – Release of detained goods – the petitioner's counsel, as an interim arrangement, pleads that the authorities may release the goods on the petitioner's providing the bank guarantee – Held that:- Pending adjudication, the first respondent will release the detained goods on the petitioner's providing the bank guarantee for
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2018 (8) TMI 494 – CESTAT MUMBAI – TMI – 100% EOU – Refund of service tax paid – input services – denial on the ground of nexus with the output service provided by the appellant – Held that:- With regard to establishing the nexus between the input and output services, the Tax Research Unit of CBEC vide letter dated 16.3.2012, has clarified that the new scheme introduced by substituting Rule 5 does not require the kind of correlation between exports and input services, which were hitherto provided under the unamended rules. It has been further clarified that service tax paid on the input services will be entitled for refund, on the basis of the ratio of the export turnover to total turnover. Since the TRU has clarified the legislative intent behind the amendment of Rule 5 of the Rules, explaining that no nexus need to be established, denial of refund benefit on sole ground of non-establishment of nexus cannot be sustained for judicial scrutiny – The refund benefit denied to the appella
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d in part and part matter on remand. – Appeal Nos. ST/86707-86714,86731/2018 – ORDER No. A/87022-87030/2018 – Dated:- 1-8-2018 – Hon ble Mr. S.K. Mohanty, Member ( Judicial ) Shri Prasad Paranjape, Advocate, for appellant Shri M.K. Sarangi, Joint Commissioner (AR), for respondent ORDER The learned Commissioner (Appeals), Central Excise, Mumbai vide the impugned order dated 10.1.2018, has disposed of nine appeals filed by the appellant. Since the issue involved in all the appeals is identical i.e. denial of refund benefit provided under Rule 5 of the Cenvat Credit Rules, 2004, the same are taken up for hearing together and a common order is being passed. 2. The appellant is engaged inter alia, in providing outsourced services, which are in the nature of transaction processing services and other related support provided to the overseas clients. The services provided by the appellant are categorized as taxable service under the head business support service . The appellant also registered
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nt, business support, convention, business auxiliary, technical testing and analysis, supply of tangible goods services etc. The refund benefit was denied by the authorities below on the ground that those disputed services are neither conforming to the requirement of the definition of Rule 2(l) of the rules for consideration of input service and that those services have no nexus with the output service provided by the appellant. Further, the refund benefit has also been denied on some of the services, on the ground of non-submission of invoices, non-payment of value of service to the vendors, non-submission of proof regarding payment of service tax on import of services, out of pocket expenses etc. 3. Learned Advocate appearing for the appellant, at the outset, submits that the appellant is not contesting denial of refund benefit in respect of the disputed services viz., catering, event management, business support, convention, business auxiliary, technical testing and analysis, supply
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ound. He further submits that under the amended provisions of Rule 5 (with effect from 1st April 2012), the service provider is not required to establish the nexus between the input and the output services and the refund has to be granted on the basis of formula prescribed under the amended Rule 5 of the rules read with the notification issued thereunder. In this context, the learned Advocate has referred to the letter F.No. 334/1/2012-TRU, dated 16.3.2012 issued by the Tax Research Unit (TRU) of CBEC, clarifying that the field formations cannot insist for establishing the nexus and refund should be granted on the basis of the prescribed formula. As regards non-submission of the invoices before the refund sanctioning authority, he submits that the same were available with the appellant, which can be produced before the original authority, if the matter is remanded back. As regards non-payment of the amount of value of service to the overseas vendors and import of services to the vendor
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d on the disputed services. 5. Heard both sides and perused the records. 6. Since the appellant concedes that it is not contesting disallowance of refund benefit in respect of the taxable services viz., catering, event management, business support, convention, business auxiliary, technical testing and analysis, supply of tangible goods, I hold that the refund benefit denied by the Commissioner cannot be interfered with at this juncture. Thus, the impugned order, so far as it rejected the refund claim in respect of those services, sustains. 7. With regard to the allegation that there is no nexus between the input services viz., renting of immovable property, cleaning service, works contract service, real estate service, management, maintenance or repair service, courier service, the said services are no doubt used/utilised by the appellant for providing the output service, which were exported. For claiming the refund benefit of service tax paid on the input service, Rule 5 of the rules
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f the export turnover to total turnover. Since the TRU has clarified the legislative intent behind the amendment of Rule 5 of the Rules, explaining that no nexus need to be established, denial of refund benefit on sole ground of non-establishment of nexus cannot be sustained for judicial scrutiny. Accordingly, I am of the view that the refund benefit denied to the appellant in respect of those disputed services is not proper and justified and the appellant should be entitled for the benefit of refund of service tax paid thereon. Held accordingly. 8. With regard to the issues in dispute namely, nonsubmission of invoices, non-payment of value of services to the overseas vendors and non-submission of document, showing payment of service tax on the import of services, I find that the relevant documents are presently available with the appellant, which have also been produced by the learned Advocate during the course of hearing. However, since those documents are required to be verified by
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2018 (8) TMI 772 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (16) G. S. T. L. 277 (App. A. A. R. – GST) – Challenge to Advance Ruling – Classification of Skin care preparations – Appellant had argued that its skin care preparations are Ayurvedic Medicaments. meant for therapeutic or prophylactic uses and put up in packaging for retail sale, and entirely correspond to the description of goods under Tariff Head 3004 of Customs Tariff Act, 1975 – in the Advance Ruling, it was held that other than 'Pailab' and 'Rupam', the remaining products mentioned in the list submitted by them are not offered primarily as medicaments and, therefore, not to be included under heading 3004.
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Whether Ayurvedic Products manufactured by the Appellant, are classifiable under Chapter 33, or any other Chapter, or as medicaments under Chapter 30 of the Tariff?
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Held that:- As per the descriptions of the products printed on the labels of the products when packaged for retail sale and f
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Rakesh Kumar Sharma, Member And Ms. Smaraki Mahapatra, Member Present for the applicant: Sri Pradip Kumar Mukherjee, Authorised Representative, and Sri Anjan Dasgupta, Advocate This appeal has been filed by M/s. Akansha Hair & Skin Care Herbal Unit, holding GSTIN 19AAECA3926GlZQ (hereinafter referred to as the Appellant ), on 08.05.2018 against the Ruling dated 09.04.2018 pronounced by the West Bengal Authority for Advance Ruling. 2. The Appellant is a manufacturer of skin care preparations and had filed an application for Advance Ruling before the West Bengal Authority for Advance Ruling on the classification of 33 of its products, which are as follows: Sl. Name of the product Description 1 Baranga Brightens the skin all the more without black heads, pimples and scar. 2 Tanuruchi Controls excessive oil secretion and takes care of scar free face. 3 Twakamadhuri Keeps skin loss without freckles and spots. 4 Subarna Removes dead cells and black heads for oil skin. 5 Angarag Beautifi
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boils and pimples. 10 Swarnabho keeps skin soft, fair, glowing, stops pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discoloration and burning sensation of skin. Also helps growing of your baby 11 Komal Shree Keeps skin soft, fair, glowing, stop pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discoloration and burning sensation of skin. Also helps growing of our baby 12 Nabaroop (Aloe Vera and Chandan) Properly cleanses, exfoliates and moisturises the skin. Helps for removing make-ups and sunscreen which clogs pores. Strengthens the natural protection of the skin. Instantly enhances low and fairness. 1m roves the skin texture of skin and bod 13 Nabaroop (Rose and Cucumber) Properly cleanses, exfoliates and moisturises the skin. Helps for removing make-ups and sunscreen which clogs pores. Strengthens the natural protection of the skin. Instantly enhances low and fairness. 1m roves the skin texture of skin and bod 14 Nabaroop (Lem
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skin smooth, healthy and glowing. 19 Twaka Snigdha (Lemon) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 20 Twaka Snigdha (Orange) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 21 Twaka Snigdha (Neem) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 22 Twaka Snigdha (Rose) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oiliness. 23 Sukhparash Prevents from pimples, blemi
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lab Anti-Crack Cream The Appellant had argued that its skin care preparations are Ayurvedic Medicaments. meant for therapeutic or prophylactic uses and put up in packaging for retail sale, and entirely correspond to the description of goods under Tariff Head 3004 of Customs Tariff Act, 1975 (hereinafter referred to as the 'Tariff). 3. The West Bengal Authority for Advance Ruling (hereinafter referred to as WBAAR ) after hearing the matter and examining the documents decided vide its Ruling dated 09.04.2018 that: Preparations for the care of the skin namely, Rupam (Pimple Pack) and Pailab (Anti-Crack Cream), in the list submitted by the Applicant are classifiable as Medicament under heading 3004 of the Customs Tariff Act, 1975. Preparations listed as Swarnajyoti, Sunayana and Tarumitra-60 have not yet come into existence, and, therefore, no rulings are pronounced on their classification. The remaining products mentioned in the list submitted by them are not offered primarily as medi
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for each individual product. Authority for Advance Ruling is cautioned against accepting similar applications in future where multiple products are covered in a single application. However, since WBAAR had admitted the application and passed a Ruling, the Appeal filed is being taken up for disposal. 6. The Appellant has filed the Appeal on the following grounds: a. The Ruling of the WBAAR has erred in not passing a Ruling for products that have yet to come into existence. Under Section 95(a) advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in Sub Section (2) of Section 97 or Sub-Section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; b. Classification is to be based on the true nature of the product and not on how they are offered; c. Classification is to be done on the settled principle of the Twin Test; d.
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t that the Ld. West Bengal Advance Ruling Authority has erred in not pronouncing its order on the products namely 'Swarnajyoti', 'Sunayana' and 'Tarumitra-60' as the products have not yet come into existence which is contrary to the definition of Advance Ruling as laid down under clause (a) of Section 95 GST Act, which specifically provides that supply of goods 'proposed to be undertaken' by an applicant also falls under the ambit of Advance Ruling. Hence, this Appellate Order will include Advance Ruling on the supply of goods proposed to be undertaken', namely Swarnajyoti, Sunayana and Tanumitra-60. 9. Central Tax (Rate) Notification No. 01/2017 dated 28.06.2017, under the Central Goods and Services Act, 2017 and Notification No FT-1125 dated 28.06.2017 under the West Bengal Goods and Services Tax Act, 2017, clearly state that Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, subheading, heading and chapter as spec
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roducts as medicaments. Reference has been made to the judgements passed by the Hon'ble Supreme Court of India in B.P.L. Pharmaceuticals Ltd. Vs. Collector [1995 (77) E.L.T. 485 (S.C.)] and Lohia Machines Ltd. vs. UOI & ORS [1987 (28) E.L.T. 234 (All.)]. The Appellant argued, citing the decision of the Hon'ble Tribunal in CCE, Pune vs. ESSEN Products (1) Ltd. [2006 (200) E.L.T. 342 (Tri. – Mumbai)], that packing is not indicative of classification under Chapter 33 of the Tariff as cosmetic or toilet preparation and that advertisement is not to be relied upon – essential character of the product is relevant. 11. The Appellant argued that the WBAAR pronounced their Ruling without considering the 'twin test' as settled by various pronouncements of the Hon'ble Supreme Court. They also argued that sole reliance on labels for classification is not lawful. The applicant also argued that the WBAAR has erred in law by classifying all items of talcum powder, sunscreen, mo
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a specified formulation . The American Heritage Medical Dictionary defines it as An agent that prompts recovery from injury or ailment; a medicine . World Health Organisation (WHO) defines medicine as the sum total of the knowledge, skills, and practices based on the theories, beliefs, and experiences indigenous to different cultures, whether explicable or not, used in the maintenance of health as well as in the prevention, diagnosis, improvement or treatment of physical and mental illness. 14. In other words, to determine whether or not a product or a formulation is to be labelled as a medicament it is necessary to consider its efficacy in treating or remedying an injury an ailment or an illness . 15. Hence, it becomes imperative for us to look into the definition of injury . Miller-Keane Encyclopaedia and Dictionary of Medicine, Nursing, and Allied Health, Seventh Edition defines injury as harm or hurt; usually applied to damage inflicted on the body by an external force . Farlex Pa
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ckened mass of skin debris. Acne : Localized skin inflammation as a result of over activity of the oil glands at the base of specialized hair follicles. Acne happens when oil (sebaceous) glands come to life around puberty, when these glands are stimulated by male hormones that are produced in the adrenal glands of both boys and girls. Freckles : a small patch of light brown colour on the skin, often becoming more pronounced through exposure to the sun. Black Patches : Dark patches refer to the presence of several dark spots spread out over a specific point of the skin than the surrounding area. The notable change in colour is an indication that skin cells around that patch are producing more melanin than it is required. It can be caused by hormonal changes, post-inflammatory marks from acne or pimples, sun exposure, age spots and liver spots. Scarring : A mark left on the skin by healing of injured tissue. Exfoliation : It involves removal or peeling of the dead skin cells from the ski
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ce. 19. The Drugs and Cosmetics Act, 1940, defines cosmetic under clause (aaa) of Section 3 as under- cosmetic means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic; 20. The Indian Standard (I.S. 4707-2) published by the Bureau of Indian Standards, gives a list of substances which MUST NOT form part of the composition of cosmetic products . The above definition clearly signifies that products with ingredients including substances which are not listed in The Indian Standard (I.S. 4707-2) may be classified as cosmetics. Hence we cannot unequivocally accept that by virtue of their ingredients, the products qualify as medicaments and not as cosmetics. The Appellant submitted that four of its products, namely Romancho (Lavender), Romancho (Vani
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he purpose and use of the product needs to be ascertained before determining its nomenclature:- Romancho (Lavender/Vanilla/Kewra) are all labeled as Body Talc and the descriptions regarding their use on the retail packs are Feeling of freshness, increases luster of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples Komal Parash is labeled as Baby Body Talc and the description regarding its use on the retail packs are Feeling of freshness, increases luster of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples In other words, all the above four products are basically the same components, Talc or Talcum Powder to feel fresh, to increases the luster of skin, to give relief from itching sensation and irritation of prickly heat, and also claims to be very helpful as a remedy in summer boils and pimples 23. Talcum Powders are classified specifically und
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zing the skin, helping for removal of make-ups and sunscreen which clogs pores, helping in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth, helping to skin and tighten skin pores, makes skin soft and more elastic, reducing excess skin oil, protecting from sun-burn injury. 25. None of the above descriptions qualify for categorising the products as medicaments or medicines as they are not used in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings; rather they are more in tandem with the definition of 'cosmetics' as we find in the Drugs and Cosmetics Act, 1940, because none of the problems that these products treat can be classified as Injury or ailment as already discussed in Para 14 and Para 15 above. 26. The General Explanation to Chapter 33 states that The products of headings 33.03 to 33.07 remain in these headings whether or not they contain subsidiary pharmaceutical or disinfectant
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included. 28. A review of the remaining items (27 in number) supplied by the Appellant, will help to classify them under respective Chapter headings, as per their description: Sl.No. Name of the product Classified under Reasons for classification 1 Baranga 33 Other powder 2 Tanuruchi 33 Face powder 3 Twakamadhuri 33 Face powder 4 Subarna 33 Face powder 5 Angarag 33 Face powder 6 Tanurima 33 Baby powder 7 Swarnabho 33 Keeps skin soft, fair, glowing, stops pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discolouration and burning sensation of skin 8 Nabaroop (Aloe Vera and Chandan 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 9 Nabaroop (Rose and Cucumber 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 10 Nabaroop (Lemon) 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 11 Nabaroop (Neem) 34
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GST – States – CCW/GST/74/2015-A – Dated:- 1-8-2018 – Government of Andhra Pradesh Commercial Taxes Department Proceedings of the Chief Commissioner of State lax Present: Sri. J. Syarnala Rao, I.A.S., Office of the Chief Commissioner of State Tax, Andhra Pradesh:: Eedupugallu Near Vijayawada CCTs Ref. No. CCW/GST/74/2015-A, Date: 01.08.2018 Sub: Andhra Pradesh Goods and Services Tax Act. 2017 – Proper Officers for exercising powers Under Section 130 of APGST Act, 2017 Regarding. In exercise of
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SARE REALTY PROJECTS PRIVATE LIMITED, DOTCOM HOME FASHIONS PVT LTD., TARA CHAND SALUJA & SONS, VEE GEE AUTO COMPONENTS PVT. LTD., ANKUR OIL & REFRIGERATION, M/s TARA CHAND SALUJA & COMPANY, M/s ALLIANCE GRAPHIC EQUIPMENT PRIVATE LIMITED, M/s BATRA ART PRESS, BENLON INDIA LTD., FRV POWER INDIA PVT. LTD., AMAN MOTORS Versus UNION OF INDIA & ORS. – 2018 (9) TMI 373 – DELHI HIGH COURT – 2018 (16) G. S. T. L. 177 (Del.) – Unable to upload data to avail of CENVAT and VAT credit or credit on stock-in-trade – Circular No. 39/13/2018-GST dated 3rd April, 2018 – Held that:- Petitioners state that they have already made a representation to the respondent authorities under the grievance mechanism and would pursue the said remedy. However, in case they
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: Mr. Vineet Bhatia, Advocate, Mr. Ruchir Bhatia, Advocate, Mr. Gaurav Dudeja, Advocate Mr. Vineet Bhatia, Advocate, Mr. Puneet Rai, Advocate For the Respondent : Mr. Akshay Makhija, CGSC, Ms. Mahima Bahl, Mr. S. D. Singh, Adv. for UOI. Ms. Sonu Bhatnagar, Sr. Standing Counsel, Mr. Vaibhav Joshi, Adv. Mr. Anuj Aggarwal, ASC, Mr. Ravi Sehgal, Advocate, Mr. Nidhi Mohan Parashar, Mr. Umang Kumar Singh, Advocate , Mr. Kirtiman Singh, CGSC, Mr. Waize Ali Noor, Prateek Dhanda, Advocates, Mr. Sanjeev Narula, Sr. Standing Counsel, Mr. Abhishek Ghai, Advocate for Revenue, Mr. Nidhi Mohan Parashar, Mr. Umang Kumar Singh, Advocate, Mr. Sanjeev Narula, Sr. Standing Counsel, Mr. Abhishek Ghai, Advocate for Revenue., Mr. Sanjeev Narula, Sr. Standing Coun
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ce mechanism has been put in place to deal with cases where assessees were not able to upload data to avail of CENVAT and VAT credit or credit on stock-in-trade. Our attention is drawn to Circular No. 39/13/2018-GST dated 3rd April, 2018. It is stated that out of 17,000 such cases, issue has been resolved and settled in approximately 13,000 cases. It is submitted that in each case where it is found that the assessee could not upload data due to any technical glitch or problem, benefit is given. It is submitted that the case of the present petitioners is also being considered as per the grievance redressal mechanism. Lastly, it is submitted that wherever any claim or representation is rejected, a speaking order giving the reasons would be pa
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2018 (9) TMI 1034 – RAJASTHAN HIGH COURT – TMI – Timelines prescribed under the Extension Notifications (Notification Number 18/2017, Notification number 19/2017 and Notification Number 20/2017- dt. 8th August, 2017 under GST Act, 2017) – Quashing of Extension Notifications – timelines viz 20th August 2017 for July, 2017 and 20th September, 2017 for August 2017 prescribed under the GSTR Notifications as last dates for filing returns of GSTR 3B – quashing the GSTR 3B Notification – declaring the Composition Orders (Order No.0l/2017-GST dt. 21st July and Order No.F.17 (131) ACCT/GST/2017/2258 dt. 21st July, 2017 prescribing the last date as 16th August, 2017 for filing form CMP 01 (for availing composition scheme under section 10 of GST Act, 2017) as arbitrary – act of respondents of making Form CMP 04 – Waiver Notification (Notification No.28 of 2017 dt. 1st September, 2017) – remedy the defect in the GSTN portal – making the form TRAN 1 available on the GSTN portal.
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Held that:-
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2017, therefore, desirous assessee can apply.
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Petition disposed off. – D.B. CIVIL WRITS NO. 15239 of 2017 Dated:- 1-8-2018 – MR KALPESH SATYENDRA JHAVERI AND MR ASHOK KUMAR GAUR, JJ. For The Petitioner : Sanjay Jhanwar, Rahul Lakhwani and Ms. Aditi Tank For The Respondent : R.D. Rastogi, ASG, Anand Sharma, Ankit Popli, R.B. Mathur, Kinshuk Jain ORDER 1. By way of this petition, the petitioner has prayed for following relief:- (a) Issue appropriate writ, order, direction to the effect of declaring that the timelines prescribed under the Extension Notifications (Notification Number 18/2017, Notification number 19/2017 and Notification Number 20/2017- dt. 8th August, 2017 under GST Act, 2017) as time period viz 1st to 5th September, 6th to 10th September, 11th to 15th September, 2017 for the month of July, 2017 and 16th to 20th September, 2017 for the month of August, 2017 for filing returns of GSTR 1, GSTR 2 and GSTR 3 respectively are arbitrary on account of the various shortcomi
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GSTR 3B are arbitrary on account of the various shortcoming/glitches on GSTN portal. (d) Issue writ in the nature of certiorari or any other appropriate writ, order, direction to the effect of quashing the GSTR 3B Notification and to issue writ in the nature of Mandamus or any other appropriate writ, order, direction to the respondents to forthwith rectify/correct the technical glitches/shortcomings in the GSTN portal and to issue fresh Notifications/cut off dates for filing GSTR 3B return affording reasonable time period to assessee for making the statutory compliances. (e) Issue appropriate writ, order or direction to the effect declaring the Composition Orders (Order No.0l/2017-GST dt. 21st July and Order No.F.17 (131) ACCT/GST/2017/2258 dt. 21st July, 2017 prescribing the last date as 16th August, 2017 for filing form CMP 01 (for availing composition scheme under section 10 of GST Act, 2017) as arbitrary in view of shortcomings/technical glitches on the GSTN portal and accordingly
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ate writ, order or direction to the effect declaring the requirement of filing of HSN details in Form TRAN 1 for assessee's having turnover of less than ₹ 1.5 crore as arbitrary and in contravention of Notification No. 12/2017 dt. 28th June, 2017 and issue writ in the nature of mandamus or any other appropriate writ, order or direction to the effect directing respondents to either prescribe separate form for assessee's having turnover of less than ₹ 1.5 crore or make specific provision for the same in form TRAN 1 or by any other means to give complete effect to Notification No.12/2017 dt. 28th June, 2017. (h) Issue appropriate writ, order or direction to the effect declaring the Waiver Notification (Notification No.28 of 2017 dt. 1st September, 2017) is so far as not providing for the refund of late payment fees already deposited by tax payers before the Waiver Notification as discriminatory and thus arbitrary and issue writ in the nature of mandamus or any other ap
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damus or any other appropriate writ, order, direction to the respondents to remedy the defect on GSTN portal and thereby enable the assessee to edit/amend/correct the particulars filled in Form GSTR 3B before online filing of return. (l) Issue appropriate writ, order, direction to the effect declaring the act of respondents of making the form TRAN 1 available on the GSTN portal after delay of 51 days from the appointed date, i.e., 1st July, 2017 as arbitrary and being in not in confirmity with Rule 117 CGST Rules, 2017 and RGST Rules, 2017 and issue appropriate writ in the nature of mandamus or any other appropriate writ, order or direction to the effect directing the respondents to suitably extend the date for filing from TRAN. 2. This court on 20.9.2017 has passed the following order which reads as under:- 1. We have heard counsel for the petitioners Mr. Sanjay Jhanwar with Mr. Prakul Khurana Mr. Rahul Lakhwani, Ms. Aditi Lodha and Ms. Archana as well as counsel for the respondents M
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lem will be resolved expeditiously. 4. In the meantime, no coercive action (penal interest, late fees and prosecution) against any of the client of the petitioners members who are referred in the petition and are informing by email, will be protected. The composition Scheme is extended upto 30.9.2017, therefore, desirous assessee can apply. 4.1 In that view of the matter, those who could not apply under composition scheme upto 16.8.2017, their applications will be accepted and if their case does not fall under composition log-in, they will send it by email and their applications will be accepted w.e.f. 1.7.2017. 3. In our considered opinion, it will be appropriate that the GST Council will decide the issue. However, the question regarding delay in filing of return, registration or late fees will not be changed and the same will be complied with pursuant to earlier order of this court. The return which are filed late because of not proper functioning of the computer will not be attribut
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2018 (9) TMI 1256 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (17) G. S. T. L. 547 (A. A. R. – GST) – Classification of goods – supply of Copper XLPE insulated armoured low tension cables – Whether the power cables supplied by the Applicant would be covered under the scope of SI. No. 1 of Notification No. 03/2017-CT?
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Held that:- Notification provides concessional rate only for the goods falling under entry no. 1 to 24 subject to certain other specific conditions. Electric Cables, being accessories, stores, materials, consumables does not automatically qualifies them for enjoying concessional rates as mentioned in Notification no.03/2017-CT. – Electric cables are not included in any of the entries of goods specified from entry no. 1 to 23 of the List of goods appended to Notification No. 03/2017-CT.
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It is agreed that cables supplied to ws Vedanta by applicant will be used to supply and transmit electricity for petroleum operations at work site (Block RJ-ON-90/1). But w
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nning of the goods specified in the List” as mentioned in entry no. 24 of the notification is not rational by any stretch of imagination – If we regard Electrical Cables as accessories, stores, materials and/or consumables for running of the goods specified in the List, then going through this logic poles, insulators, transformers and all other equipments used to ensure flow of electricity at work site from the main source to the supply point are to be covered under this classification.
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The applicant has failed to identify/clarify as to under which category i.e. accessories, stores, materials or consumables as mentioned in S.No. 1 to 23 of the list, would electrical cables fall. Further he has not given any assurance regarding restricting the use of electrical cables as accessories, stores, materials, consumables to goods falling under entry no. I to 23 of the list, which is an essential pre requisite to claim concession.
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Ruling:- “Electrical Cables” do not fall under Entry
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roceedings nor proceedings were passed by any authority. Based on the above observations, the application is admitted to pronounce advance ruling . 1. Submission of The Applicant: 1. KEI Industries Ltd. (hereinafter referred to as the Applicant ) is a public limited company incorporated in India and is engaged in the business of manufacturing and supply of various kinds of Power Cables. 2. The present application pertains to the supply of Copper XLPE insulated armoured low tension cables(hereinafter referred to as electric/power cables ) by the Applicant to M/S. Vedanta Ltd. 3. M/s. Vedanta is undertaking petroleum operations under PRE-New Exploration Licensing Policy(PRE-NELP) granted by the Government of India/State Government to Cairn Energy India Pvt. Ltd. in the State of Rajasthan which was vested in Vedanta after the merger of Cairn India Pvt. Ltd. in Vedanta. For carrying out such petroleum operations, it uses various kinds of machines and equipment. Almost all machines and equi
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r equipments for which the cables are required and therefore, the Applicant is supplying power cables to the Applicant on the basis of the job sheet provided by M/s. Vedanta. Once the Applicant receives the order sheet, it manufactures the power cables as per the specifications provided therein. The Applicant manufactures the power cables of exact length/specifications as ordered by M/S. Vedanta and the same are supplied exclusively to M/s. Vedanta and not to any other recipient. 7. It is pertinent to note that even though the cables are manufactured as per the specifications provided by M/s. Vedanta and supplied exclusively to M/S. Vedanta, the cables are not exclusively or specifically meant to be used with such machines in as much as these power cables are general power cables and are capable of being used with any machine/equipment. 8. The Applicant submits that issue on which advance ruling is sought in the instant matter relates to applicability of Notification No. 03/2017-Centra
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h is specified in column (3) of the Table with relevant List appended hereto and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, from so much of the central tax leviable thereon under section 9 of CGST Act as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions annexed to the notification .A corresponding benefit is given under Rajasthan Goods and Services Tax Act vide File No. F.12 (56)FD/Tax/2017-Pt-1-42 dated 29.06.2017. Similar benefit on inter-state supplies is given under IGST Act vide Notification No. 03/2017-lntegrated Tax (Rate) dated 28.06.2017. 12. Further, Sl. No. I of Notification No. 03/2017-CT provides that the said benefit would be available for the goods provided in List 1 of Notification No. 03/2017-CT. The List of goods appended to Notification No. 03/2017C
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ns undertaken under the specified contracts. However, the term specified contracts is not defined under Notification No. 03/2017-CT. On a careful perusal of Sl. No. l, it can be inferred that specified contracts are those contracts which are entered under the policies specified in the list. However, unlike other clauses of Sl. No. I, clause (b) does not provide the policy under which the specified contracts are entered. 15. Applicant further stated that Condition No. I to SI. No. 1 which provides that the goods should be supplied to the organization/companies who have entered into contract with the Government of India. On a conjoint reading of clause (b) along with condition no. 1(ii), it can be inferred that specified contracts referred in clause (b) are those contracts which are entered into with the Government of India in relation to petroleum operations. 16. Applicant stated that prior to introduction of New Exploration Licensing Policy, licenses for petroleum explorations were gra
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Notification No. 03/2017-CT. Moreover, it is also not defined in the CGST or IGST Act. In common parlance, an Indian Company would mean any company who is established and registered in India in accordance with the relevant laws prevailing at that time. 20. To substantiate the same, reference is made to the definition provided in the Income Tax Act, 1961, which defines Indian Company under section 2(26) as under: (26) Indian company means a company formed and registered under the Companies Act, 1956 and includes……………. 21. Dealer stated that in view of the above, it can be concluded that to claim benefit of concessional rate of tax under Notification No. 03/2017-CT the following conditions are required to be satisfied cumulatively in the instant case: i. The goods must be covered under the list to the Notification No.03/2017-CT; ii. The goods must be supplied in connection with petroleum operations undertaken under specified contracts; iii. The goods are supplied to an Indian c
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by the Applicant to Vedanta are used for supplying electricity to the machines which are used for undertaking petroleum operations under the specified contract i.e. the contract entered into with the Government of India. Thus, it can be concluded that the supply of power cables is in connection with the petroleum operations under the specified contract. 24. Condition No. 3: In the instant case, the Applicant is supplying electric cables to Vedanta which is a public limited company registered under the Companies Act, 1956. Thus, the Applicant is supplying goods to an Indian Company. Such cables are supplied to Vedanta in relation to their petroleum operation being undertaken in the State of Rajasthan. It is to be noted that the license for petroleum exploration in field RJ-ON-90/1 was given to Cairn Energy India Pvt. Ltd. under the Pre-NELP. Subsequently, Cairn Energy India Ltd. was merged into Vedanta Ltd. Thus, with this merger, the petroleum exploration license granted to Cairn Ener
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achines covered under the List appended to Notification No. 03/2017-CT. However, the term accessories is also not defined in Notification No. 03/2017-CT. so applicant has relied on the dictionary meaning of the term accessories , which have been extracted here under: (i) The New Merriam-Webster s Dictionary a person or thing that aids subordinately, an adjunct, appurtenance, accompaniment (ii) The Oxford Advanced Learners Dictionary an extra piece of equipment that is useful but not essential (iii) The Collin s Co build English Dictionary for Advanced Learners accessories are items or equipment that are not usually essential, but which can be used with or added to something else in order to make it more efficient, useful or decorative (iv) The Chamber s English Dictionary subsidiary, present along with something more important 29. Moreover, while determining the meaning of the term accessories , the Applicant has relied on various judgments: a) Hon ble Apex Court in the matter of Annap
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ive to the machines used by Vedanta. In fact, the said power cables so supplied to M/S Vedanta are capable of being used with more than one kind of machines. It is submitted that even though a particular product is capable of being used with more than one kind of machines, the same would still qualify as accessories . This is supported by the decision of Hon ble Apex Court in the matter of Annapurna Carbon Industries Co. vs. State of Andhra Pradesh [AIR 1976 SC 1418] = 1976 (3) TMI 156 – SUPREME COURT OF INDIA,. The relevant extract of the said decision is reproduced as under: 7. ………Apparently, the deciding factor is the predominant or ordinary purpose or use. It is not enough to show that the article can be put to other uses also. It is its general or predominant user which seems to determine the category in which an article will fall. 10……."Accessories" are not necessarily confined to particular machines for which they may serve as aids. T
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nificant (ii) The Oxford American Desk Dictionary, New edition, 2000 important, essential, relevant (iii) The Chambers Dictionary, New edition that out of which anything is or may be made, that which may be made use of for any purpose (iv) The New Lexicon Webster s Dictionary, Vol. 1 necessary tools, equipment, etc, (v) Collin s English Dictionary for Advanced Learners, new edition materials are the things that you need for a particular activity (vi) Oxford Advanced Learner s Dictionary (pl.) things that are needed in order to do a particular activity 33. Applicant stated that on careful perusal of the above extracted dictionary meanings of the term material , it is apparent that the term material means and includes all those things, equipment or implements which are necessary or important for carrying out any particular activity. 34. In view of the above discussions applicant states that the power cables supplied are required for a particular purpose i.e. providing electricity to the
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under Notification 10/97-C.E. 36. According to applicant, it can be safely concluded that power cables supplied by the Applicant to M/s. Vedanta are the goods covered by the list (entry no, 24) appended to Notification No. 03/2017-CT. Moreover, the power cables are supplied to M/s. Vedanta, an Indian company, against the certificate issued by the Directorate General of Hydrocarbons. As all the conditions prescribed in Notification No. 03/2017-CT for Sl. No. 1 are satisfied, the Applicant is eligible for the benefit of concessional rate of duty under Notification No. 03/2017-CT. 37. Applicant contents that intention on the part of the Applicant and M/S Vedanta to supply/procure such power cables for the purpose of running machines to be used in petroleum operations. 38. Based on above the applicant states that it can be inferred that the power cables supplied by the Applicant to Vedanta which are meant to be used for running the machines would be covered under either of the several hea
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ld fall within the scope of Sl. No. 1 of Notification No. 03/2017-CT and thus, leviable to concessional rate of CGST and SGST or IGST, as may be applicable. 7. Personal Hearing (PH): In the matter personal hearing was given to the applicant. Ms Jyoti Pal (Advocate) appeared for personal hearing on 28.07.2018. During the PH she submitted a written additional statement containing the definition of term accessories and material and certain judicial precedents in support of their application which was placed on record. She reiterated the submission already made in the application for Advance Ruling and further requested that the case may be decided as per the submission made earlier in Advance Ruling Application. 8. Opinion of Jurisdictional Officer: The jurisdictional Officer in his comments has stated that sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods relates to the one specified in this list. Which
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wer Cables . b) The applicant has to supply electrical cables in accordance with the specifications of the WS Vedanta Ltd. which is undertaking petroleum operations in Rajasthan and electrical cables are needed for providing electricity to machines and equipments. c) Directorate General of Hydrocarbons certifies that goods i.e. power cables of various specifications are required for the petroleum operations. d) Applicant contends that power cable supplied to M/s. Vedanta for supplying electricity to the machines or equipments used in its petroleum operations would qualify as material , accessories , consumables , and/or stores of SI. No. 1 of Notification No. 03/2017-CT for running machines listed in the list annexed to that notification. (Entry no.l to 23) and thus can be supplied at concessional rate as mentioned in the notification. e) Notification No. 03/2017 provides for the intra-State supplies of goods, the description of which is specified in column (3) of the Table with releva
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r New Exploration Licensing Policy in which goods are being supplied to the organization/companies who have entered into contract with the Government of India in relation to petroleum operations. h) Further, this benefit would also be subject to the conditions of certification from the Directorate General of Hydro carbons certifying that the goods are required for the petroleum operations referred in the SI. No. 1. i) Thus it can be concluded that to claim benefit of concessional rate of tax under Notification No. 03/2017-CT, the following conditions are required to be satisfied cumulatively in the instant case: i. The goods must be covered under the list to the Notification No.03/2017-CT; ii. The goods must be supplied in connection with petroleum operations undertaken under specified contracts; iii. The goods are supplied to an Indian company or a foreign company or a consortium or a contractor thereof in connection with the operations undertaken under a contract with the Government
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goods appended to Notification No. 03/2017-CT. m) In Advance Ruling Application the applicant has citied certain judgements and citation from various courts for categorizing Electrical cables as accessories, stores, materials and/or consumables as mentioned in entry no. 24 of the notification, which were carefully examined. To qualify for concessional rate of tax, these Judgements and citations have to be analysed and applied strictly in light of condition laid down in Notification No. 03/2017-CT. Notification provides concessional rate only for the goods falling under entry no. 1 to 24 subject to certain other specific conditions. Electric Cables, being accessories, stores, materials, consumables does not automatically qualifies them for enjoying concessional rates as mentioned in Notification no.03/2017-CT. Entry no.24 of the list specifies 24. sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods spec
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es not hold good. o) Moreover on examination of purchase orders it is found that they too do not specify that electrical cables supplied will be accessories, stores, materials and/or consumables to which specific goods as mentioned in entry no. 1 to 23 of the list. p) More so the applicant in Advance Ruling Application has himself stated that even though the cables are manufactured as per the specifications provided by Vedanta and supplied exclusively to Vedanta, the cables are not exclusively or specifically meant to be used with such machines in as much as these power cables are general power cables and are capable of being used with any machine/equipment. (pg. 7 of ARA) Further the applicant has declared In the instant case, the power cables supplied by the Applicant are not specific or exclusive to the machines used by Vedanta. In fact, the said power cables so supplied to M/S Vedanta are capable of being used with more than one kind of machines. (pg. 20 of ARA) Here again the appl
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ectorate General of Hydrocarbons dt. 18.01.2018 (purchase order no. 4500030187 & 450030182) it clearly states that This Certificate would stand withdrawn in case the said good are used for purposes other than its intended use. r) Thus the notification restricts the entry no. 24 of List of goods vis-a-vis only to the goods falling under entry no I to 23 of the list for claiming concessional rate. Use of Electrical Cables supplied for all other purposes or for all other equipments will not only withdraw the certification by Directorate General of Hydrocarbons but also disqualify the concessions. s) It is agreed that cables supplied to ws Vedanta by applicant will be used to supply and transmit electricity for petroleum operations at work site (Block RJ-ON-90/1). But will these electrical cables supplied be used as accessories, stores, materials and/or consumables for goods ONLY covered under entry no. 1 to 23 is not clear from the documents and evidences submitted by the dealer. Even
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lectricity is downloaded from the main source ( i.e. from grid or transformers ) and further transmitted , distributed or supplied to various points in working area. Machines, equipments and accessories draw supplies of electricity from these points to be functional. Hence Electrical Cables are generally used to set up a network of wires and cables which are usually permanent in nature through which electricity can flow, distributed and supplied to various points. To regard Electrical Cables as accessories, stores, materials or consumables for running of the goods specified in the List as mentioned in entry no. 24 of the notification is not rational by any stretch of imagination. If we regard Electrical Cables as accessories, stores, materials and/or consumables for running of the goods specified in the List, then going through this logic poles, insulators, transformers and all other equipments used to ensure flow of electricity at work site from the main source to the supply point are
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2018 (12) TMI 1086 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI – Levy of GST – supply of services or not – contribution made by Members towards “Annual Membership Fees and registration fees” to the Corpus Fund of BCSBI – recurring expenditure – Principle of Mutuality – whether the applicant is providing supply of services to their members and if so, is there any consideration received by them for such supply of services/ goods?
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Held that:- These activities are undertaken only for and in respect of the Member Banks, who have voluntarily become their members. Hence their primary objective is to guide the public and publicise about the Codes and Standards and Commitment of their Member Banks. Hence, the applicant is firstly developing and publishing and then publicizing Banking Codes and Standards for the banks who are their members and after this, they are monitoring its compliance, undertaking further research with regard to codes and standards and are also training bank em
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erest amounts which are further used for performing their activities. In other words if there is no fee there is no corpus fund and no interest payment which can be used to fund their activities which are in the form of supply of services to their member banks. Thus here there is no doubt that consideration is flowing from Banks to the applicant in the form of Annual Membership Fee and Registration Fee which are being utilized by the applicant for generating further income as found feasible by them. Thus the consideration is clearly in the form of Annual Membership Fee and Registration Fee.
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Principles of mutuality – Held that:- The essence of the principle of mutuality is present only in situations where a group of persons form an association and contribute to constitute income of the associations in the nomenclature of a common fund, which so collected is used for the benefit of the members. Here the member banks have not come together contributing their resources to form the bo
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tinct from each other.
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The “Principle of Mutuality” is non existent in the subject case.
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The activity of Applicant is to be termed as “Business” as provided under Section 2 (17) (e) of the CGST Act, 2017. – GST-ARA-24/2017-18/B-82 Dated:- 1-8-2018 – SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by The Banking Codes and Standards Board of India, the applicant, seeking an advance ruling in respect of the following question : Whether GST is liable to be paid on the contribution made by Members towards Annual Membership Fees and registration fees to the Corpus Fund of BCSBI and recurring expenditure being incurred. At the outset, we w
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of the Report of the Taraporewala Committee for the purpose of creating awareness and ensuring the correct following of the Codes and Standards for Services by the Banks in India. For the first 5 years i.e. from 2006 to 2011, it was fully funded by the Reserve Bank of India and the Applicant started to raise its own Corpus Fund for its activities from the Member Banks from 2007 by way of Annual Subscription Fees depending on the Gross Domestic Assets of the member Bank. From the year 2010-11 to 2014-15, the RBI has funded the Applicant Board to the extent of the shortfall between the expenditure and interest income of the Corpus. The Annual Subscription is collected only to run the day-to-day activities in the interest of Consumer Protection. Major part of the expenditure is spent on creating consumer awareness of their rights and the balance is towards overhead and salaries. No service is provided by the Applicant to the Member Banks. The Membership is voluntary. However, the Member
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monitor and to ensure that the banking Codes and Standards voluntarily adopted by Banks are adhered to in true spirit by Banks in delivering the services, as promised, to their customers. iii. To conduct and undertake research of the Codes and Standards currently in vogue in and outside India. iv. To enter into covenants with Banks on observance of the codes and standards and for that purpose to train employees of such Banks about the Banking Codes. vi. To advertise and publish promotional literature in newspapers and otherwise about the Codes and Standards for the guidance and knowledge of the public through Web site, advertisements in the newspapers, magazines, journals, TV/ Radio, hoardings or any other mode which the Society may deem fit. vii. To take up specific assignments, if any, in the areas coming under the Society s objects as projects, turnkey solutions or on any other terms of contracts with in-house resources or with the participation of outside agencies in order to fully
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icant carries out the various activities as detailed above. 4. Further, the moot question about the very taxability of the activity of the Applicant under the Goods & Services Tax arises on account of the following facts: a. The definition of Supply as per Section 7 of the Central Goods & Services Tax Act, 2017 and whether the activity of the same would be covered under the term Supply . b. The definition of Consideration as per Section 2 (31) of the Central Goods & Services Tax Act, 2017 and whether the amount received by way of contribution to the Corpus from Member Banks would be covered under the term Consideration . c. The activity of the Applicant Board is squarely Covered under the Principle of Mutuality . The various High Courts and Tribunals have consistently held that the activity Of Clubs & Associations for its own members does not amount to Service and the moneys collected by way of Membership Subscription, does not amount to Consideration . The Principle of
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PPLY: 7. (1) For the purposes of this Act, the expression supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1),- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a
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clude any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; The term Business is defined in Section 2 (17) of the CGST Act, 2017 as under: BUSINESS: (17) business includes- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause
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does not fall under either of them, as discussed herein under: SUPPLY: It is clear from the definition of Supply that firstly the same involves all forms of supply of goods or services. In this regard, there is no question of any goods in this case. As such, it is to be seen whether any service is provided by the Applicant. As already stated above, applicant is collecting Corpus Fund from Member Banks and the entire activity is related to public awareness about the codes & standards followed by member Banks. This entire activity, including the salaries of the staff is paid only through the interest earned at present from the Corpus Fund, which is capitalized. There is no facility or benefit of any kind offered by the Applicant to Member Banks for their contribution to the Corpus Fund. Also, the entire activity of public awareness programmes and salaries is funded only through the interest earned by the Applicant at present. As such, there is no element of any supply by the Applica
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eating public awareness and consumer guidance/ protection programmes regarding their banking rights. BUSINESS: The Applicant is not doing any activity in the nature of any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity so as to constitute Business . Further, even if we consider clause (e) of the definition of Business i.e. provision by a club, association, society, or any such body (fora subscription or any other consideration) of the facilities or benefits to its members , then too, the activity of the Applicant is not covered in as much as there is no any kind of facility, benefit or service given to the Member Banks by the Applicant. The entire fund collected by way of contribution from Member Banks is towards the Corpus and only the interest earned from this Corpus is used for public awareness programmes and day-to-day expenses of the Applicant Board. Thus, there is no activity, which amounts to business to attract GST. 1. The ent
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either as a society or a company registered under Section 25 of the Companies Act, 1956, or even as managed by a public trust, with such activities primarily intended to be confined to its members. What is Principle of Mutuality? Often, we come across situations where a group of people forms an association (could be formal or informal) and pool in their surplus income in the association s common fund. The fund so collected is then used for the benefit of the members when needed. Take for e.g. where the members associate themselves together for the purpose of insuring each other s life on the principle of mutual assurance, that is to say, they contribute annually to a common fund out of which payments shall be made, in the event of death, to the representatives of the deceased members. Thus, should this monies received by the member be taxed? The answer is No, as principle of mutuality would be applicable. This doctrine rests on the principle that a person cannot make a profit from hims
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tioned within the four boundaries of the above mentioned principal conditions of the doctrine of mutuality. In fact, the Principle of Mutuality applies to all taxes i.e. Income Tax, VAT/ Sales Tax and Service Tax, alike. The more important case laws are as below: Principle of Mutuality was considered in C. I. T. V Bankipur Club 1998 (109) STC 427 (SC) = 1997 (5) TMI 392 – SUPREME COURT. These principles are applicable and have been applied by the Calcutta High Court in Saturday Club ltd. (2005 (180) E.L.T. 437 (Cal.)) =2004 (6) TMI 11 – HIGH COURT CALCUTTA as concurred to in Dalhousie Institute (2005 (180) E.L.T. 18 (Cal)) = 2004 (6) TMI 10 – HIGH COURT CALCUTTA. (EXHIBIT A-1 to A-3). 2012 (26) S.T.R. 401 (Jhar.) = 2012 (6) TMI 636 – JHARKHAND HIGH COURT IN THE HIGH COURT OF IHARKHAND AT RANCHI, Prakash Tatia. CJ. and Aparesh Kumar Singh. J. RANCHI CLUB LTD. Versus CHIEF COMMR. OF C. EX. & S.T.. RANCHI ZONE W.P. (T) No. 2388 of 2007, decided on 15-3-2012 Club – Incorporated as Comp
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f Finance Act, 1994. [para 18] Sale and service – Nature of – Sale entails transfer of property whereas service does not – However, both transactions requires existence of two parties – Sale requires seller and buyer, and Service requires service provider and service receiver. [para 18] 2013 (31) S.T.R. 645 (Guj.) = 2013 (7) TMI 510 – GUJARAT HIGH COURT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD, Ravi R. Tripathi and R.D. Kothari, JJ. SPORTS CLUB OF GUJARAT LTD. Versus UOI, Special Civil Application Nos. 13654-13656 of 2005. decided on 25-3-2013 Club – Finance Act, 1994 – Sections 65(25a), 65(105)(zzze) and 66 – Service Tax on club rendering service to its members – HELD : It was ultra vires and beyond legislative competence of Parliament – There was no loss of mutuality of club members even if club was incorporated under Companies Act, 1956 – Ranchi Club Ltd. [2012 (26) S.T.R. 401 (Jhar.)] = 2012 (6) TMI 636 – JHARKHAND HIGH COURT applied – Department s plea that they have not accepted
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given – Memorandum of association showing appellant not a commercial concern – Programmes conducted in the nature of continuing education – Objective is professional development and not to impart skills for particular job or examination – Programmes not covered under commercial training or coaching – Appellant not covered under relevant service – Sections 65(26), 65(27) and 73 of Finance Act, 1994. [paras 4.5, 4.7, 4.10] Club or Association service – Receipts without return – Member not entitled to any specific service in return – Institutions also become members – Membership fee to be paid without expecting any return – Revenue not brought out the services or advantages received by members on paying fees or other amount – Service tax not leviable on amounts received from members, member-institutions and trade – Sections 65(25a) and 73 of Finance Act, 1994. [paras 4.11, 4.12] Convention service – Commercial concern – Service tax liability attracted only if Convention service rendered
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and no GST is leviable on the activity of the Applicant under the Principle of Mutuality even under the CGST Act, 2017 and the Rules made thereunder. STATEMENT REGARDING INTERPRETATION OF FACTS: The following facts pertaining to the Applicant s organization and its activities are relevant to consider the activity of the Applicant as not eligible to GST: a. The Applicant Board is registered as a Charitable Pubic Trust under the Maharashtra Public Trust Act, 1950 and also registered as a Society under Societies Registration Act,1860. b. For the initial 5 years from 2006 to 2011, the Applicant was totally funded by the Reserve Bank of India, Thereafter, the RBI was funding the Applicant o the extent of short fall between expenditure and interest income till 2014-15. c. The income of the Applicant Board is only in the form of Corpus Fund from Member Banks, collected as Annual Subscription & Registration fees and which is totally deposited in the bank and capitalized. d. The entire acti
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to its own Members out of the subscription collected, on the Principles of Mutuality. The above facts, therefore, support the contention of the Applicant Board that they are not liable to Goods and Services Tax. Additional Submission in Advance Ruling Application for Banking Codes And Standards Board of India We are thankful for the patient hearing given on 25-04-2018. Our Clients have made submissions in their Advance Ruling Application pertaining to their activity i.e. collecting Membership Fees from all its Member Banks, which is neither falling under the definition of Supply nor under Consideration or under the definition or Business as provided under CGST Act, 2017, as explained in detail during the said hearing dated 25-04-2018. To elaborate the said legal provisions along with the factual matrix pertaining to our Clients Banking Codes and Standards Board of India (hereinafter referred to as BCSBI for the sake of brevity), as desired, we make the additional written submissions,
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relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; The definition of Consideration thus provides that the payment should be made in respect of the Supply from one person to another. As such, the definition of Consideration is not independent and should be read alongwith the definition of Supply , wherein the transaction is between two Distinct Persons . As such, if the transaction under question does not fall within the ambit of Supply , then the same cannot also come under the purview of Consideration as the Consideration has to be in Consonance with Supply. In the case of the Applicant there is no element of Supply as envisaged under CGST Act, 2017 as there is no transaction c
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s year and shall be of such amount, as the Governing Council may determine as payable by each Member. The Governing Council (CC) in its 103rd Meeting held on 31.01.2017 reviewed the financial position of BCSBI and has decided to retain the total membership subscription for 2017-18 at last year s level ₹ 800 lakh. Further, as the subscription is calculated based on individual member s gross domestic assets as on 31.03.2016, the overall Rate for computing the Annual Membership Fee for the year 2017-18 has reduced to********%) (previous year s rate was ******%) This annual membership will be credited to the Corpus Fund of BCSBI as hitherto. The Applicant, BCSBI collects contribution from its Member Banks, which is credited to their Corpus Fund. The interest earned on this amount is the only income of BCSBI (as mentioned in Para I above) which is spent for the activities of the BCSBI as per guidelines issued by the Reserve Bank of India. BCSBI issues this letter and while transferrin
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nt in public interest for meeting its objects. Firstly, it can be seen that the contribution of each member Bank is credited only to the Corpus Fund of BCSBI and the interest earned on such contribution is used for the activities of BCSBI. The Corpus Fund is needs to be understood in the right perspective, which will establish that the contribution to Corpus Fund by each Member will not constitute as Consideration , in any manner and the same cannot be taxed under GST. CORPUS FUND Corpus Fund is the fund generated and kept for the existence and sustenance of the Organization. For a charitable organization, Corpus Fund are of paramount importance. Normally a corpus fund denotes a permanent fund kept for the basic expenditures needed for the administration and survival of the organization. The corpus fund is generally not allowed to be utilized for the attainment of the purposes, but the interest/dividend accrued on such fund can be utilized for its activities as well as accumulated. Cor
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nner they wish to use the said contribution. In fact, the Corpus Fund cannot be used for fulfilling the Objects of the Trust but the same has to be kept intact for all times as being Capital of the Trust. Sample Copy of BCSBI Letter to Banks for Contribution and Direction of the Banks to imply their Contribution to Corpus Fund is annexed and marked as (EXHIBIT A-1 & A-2). The Annual Report of the Applicant i.e. BCSBI of the F.Y. 2016-17, have already been submitted during the Final Hearing which was held on 25-04-2018, which establishes that the Contributions received from Banks is not forming part of income of the Applicant i.e. BCSBI. In normal parlance if any person is receiving any consideration from another for any kind of Supply , can the Service Recipient have any control how the consideration paid by him to be used by the Supplier of Service or goods, as the case may be? The answer is a rhetoric NO . However, in this case, the Contribution made by the Banks is not Considera
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e conclusion of Principles of Mutuality . The said principle has its relevance in all the taxations laws i.e. Income Tax, Service Tax & VAT and has universal application. Principle of Mutuality has its implication in all statute as the foundation fact as there is no existence of two separate legal entities. The Applicant has relied upon various Judgments beginning from EXHIBIT A-1 to EXHIBIT B-3 and also certain latest Service Tax Judgments have been submitted during the hearing. The issue is no more res integra as decided by Hon ble Supreme Court, various High Courts and Tribunals throughout India for all taxing Statutes, Mere change in taxing Statute cannot make change in fundamental concepts. iii. IT SHOULD BE IN THE COURSE OF OR IN FURTHERANCE OF BUSINESS: For any activity to be considered as Supply , these 3 elements have to be fulfilled. From the submissions made above, it is clear that there is no Consideration involved in this activity and there is no existence of 2 persons
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meant to be in the course of business or furtherance of the same. As such, the definition of Business is very vital. In case of the Applicant Section 2 (17) (e) will be applicable. It provides that if any provision is made by Club, Association or similar Body, which should be for Subscription or other consideration and for provision of any facility or benefit to its Members. In this backdrop, the nature of activity of Applicant and facts of the issue at hand are to be appreciated, which are as under; The Applicant is not collecting any consideration from its Members, which has been established, above. Further, the Applicant is not providing any facility or benefit to its Members. The Applicant is an Association, which frames Codes of Bank s commitment to Customers for its Member Banks. If any Bank Opts to be a Member (this Membership is Optional and not mandatory to all Banks) of the Applicant they have to adhere to the Codes and guidelines as prescribed by the Applicant. The RBI is a
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ir Member Banks. There is no provision of any benefit or facility provided by the Applicant to its Members. From the above submissions, it is amply clear that the activity of the Applicant does not fall under the ambit of Business , at all. In view of the detailed submission made herein above and the submission made in the Application and the submissions made during the hearing in the matter, it is evident that the activity of the Applicant does not fall under the definition of Supply by any parameter and as such the Applicant are not required to obtain registration for such activity. In this backdrop, the issues which are requested to be addressed by the Advance Ruling Authority are as under: 1. Whether the activity of BCSBI I.e. The Applicant is falling under the definition of Supply , as per Section 7 of the CGST Act, 2017? 2. Whether the contribution made by Member Banks to Corpus Fund can be considered as Consideration , as per Section 2 (31) of the CGST Act, 2017, when the said i
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Sh. Anil Khude, Asstt. Commr. Of S.T. Mumbai received is as follows:- Going through the submission made by M/s. The Banking Codes And Standards Board Of India (hereinafter called as BCSBI) It is observed that the BCSBI was formed in the year 2006 by the RBI and initially it was fully funded by RBI, however from 2007 the BCSBI started collecting annual subscription fees from the member banks. BCSBI is registered under the Societies Registration Act, 1860 and also as a public trust under the Maharashtra Public Trust Act, 1950. BCSBI undertake various activities in relation to member banks. Some of them from angle of supply of services/goods can be enumerated as follows:- 1. To advertise and publish promotional literature in newspapers and otherwise about the Codes and Standards for the guidance & knowledge of the public through Web site, advertisements in newspapers, magazines, journals, TV/ Radio, hoardings or any other mode which the Society may deem fit. 2. To organize teaching a
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e, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made fora consideration by a person in the course or furtherance of business; Section 2(31) consideration in relation to the supply of goods or services or both includes any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; In this submission the BCSBI emphasized the principle of mutuality and on the basis of which pleaded that its activities are not taxable under the GST Act. It is to be noted the principle of mutuality is based on the doctrine that the person cannot make profit from himself. The essence of this principle of mutuality is present only in situation wherein the group of persons forms an association (formal or informal) and pull there surplus inco
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H. S, Sharma, Sr. V.P. appeared and made submissions orally as per details in the application and requested for admission of their ARA. No person as present from the side of Jurisdictional GST office. The application was accepted and was scheduled for final hearing on 04.04.2018 but the applicant requested for adjournment in the matter for personal reasons. Shri Jasbir Singh, Inspector appeared and stated that they had not received copy of application, however copy of notice was received by them. The copy of application was given and he was requested to ensure appearance or submission by next date of hearing. The final hearing in the matter was held on Ms. Kirti S. Bhoite, Advocate along with Sh. Phanraj Jain, C.A. and Sh. H. S. Sharma, Sr. V.P. appeared and reiterated the contention as made in their ARA and submissions made therewith. Sh. Anil Khude, Asstt. Commr. of SGST Mumbai appeared and stated that they would be making submissions within one week. The applicant also requested to
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pply which is as under:- Section 7 (1):- For the purposes of this Act, the expression supply includes – (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal lade or agreed to be made for a consideration by a person in the course or furtherance of business; (b). ………………; (c) the activities specified in Schedule 1, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1), – (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of good
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rds voluntarily adopted by Banks are adhered to in true spirit by Banks in delivering the services, as promised, to their customers. iii. To conduct and undertake research of the Codes and Standards currently in vogue in and outside India. iv. To enter into covenants with Banks on observance of the codes and standards and for that purpose to train employees of such Banks about the Banking Codes. v. To advertise and publish promotional literature in newspapers and otherwise about the Codes and Standards for the guidance and knowledge of the public through Web site, advertisements in the newspapers, magazines, journals, TV/Radio, hoardings or any other mode which the Society may deem fit. vi. To take up specific assignments, if any, in the areas coming under the Society s objects as projects, turnkey solutions or on any other terms of contracts with in-house resources or with the participation of outside agencies in order to fully implement the Code. vii. To organize teaching and trainin
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s and Commitment of their Member Banks. Hence we find that the applicant is firstly developing and publishing and then publicizing Banking Codes and Standards for the banks who are their members and after this, they are monitoring its compliance, undertaking further research with regard to codes and standards and are also training bank employees about these codes. We also find that the applicant is also advertising and publishing promotional literature in newspapers and are also organizing, teaching and training courses, conferences, seminars and lectures and also publishing journals, pamphlets, reports, books and booklets in this regard. Thus we find that the applicant are basically drafting certain codes and standards and are directly as well as indirectly ensuring that member banks adhere to these standards and codes and thus provide banking services as per these codes and standards and thus the credibility of services of member banks increases if they are able to provide services a
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a consideration or otherwise as we find that the second part of the definition says that …….all forms of supply of goods or services…….for a consideration. For performing the said activities, the applicant requires funds which are collected by them in the form of Annual Membership Fees and registration fees. Even though as per their submissions these fees are not used by them, it is clear that the said fees which are termed by them as corpus fund are used to generate interest amounts which are further used for performing their activities. In other words if there is no fee there is no corpus fund and no interest payment which can be used to fund their activities which are in the form of supply of services to their member banks. Thus here there is no doubt that consideration is flowing from Banks to the applicant in the form of Annual Membership Fee and Registration Fee which are being utilized by the applicant for generating further income as found feasible
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gistration Act, 1860 and can therefore be termed as a society, supplies service in the form of providing facilities or benefits to its Member Banks for a subscription (in this case Annual Membership Fees and registration fees). Such provision of facilities or benefits to its Member Banks, by the applicant is squarely covered under Section 2 (17) (e) of the GST Act. In their further submission, the applicant at one point has stated that Any Supply is meant to be in the course of business or furtherance of the same. As such, the definition of Business is very vital in case of the Applicant Section 2 (17) (e) will be applicable and services provided by them to member Banks would be covered in definition of business as given in section 2(17) (e) of GST ACT. Thus there is no doubt that their activity falls under the Section 2 (17) (e) as mentioned above. It is clearly seen from their submissions that they are collecting Annual Membership Fees and registration fees from their member banks an
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itment to Customers, which is in consonance with the basic frame work in line provided by the RBI related to consumer protection, but this supply of service is only to member banks and not to banks who have not become members. The applicant has also submitted that the Member Banks undertake to adhere to the Codes of Banks commitment to Customers and guidelines prescribed by the Applicant which clearly imply that adherence to codes and standards of the applicant gives further credence to the functioning and services of these banks. We find that they have submitted that the RBI guidelines are for the benefit of people who undertake any transaction with banks such as their Account Holders etc. This is an obligation on the Banks and the Applicant undertakes research and related work to prepare the Codes of Banks commitment to Customers that are required to be adhered to, by the Member Banks. It may be mentioned here that all the Banks are obliged to follow the guidelines issued by RBI with
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not make, in what is its true sense or meaning, taxable profit by dealing with himself . We find that the applicant body was formed in the year 2006 and then went on to enlist Banks as members. This argument put forth by the applicant does not hold good for the present facts. In the subject issue the member banks have not come together to form the applicant body. The applicant body had been formed by the RBI to prepare codes of commitment to customers of various banks and this activity is done by the applicant very selectively i.e. only to Banks who pay them some fees. The applicant is not performing any sovereign function. The essence of the principle of mutuality is present only in situations where a group of persons form an association and contribute to constitute income of the associations in the nomenclature of a common fund, which so collected is used for the benefit of the members. Here the member banks have not come together contributing their resources to form the board like t
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o the applicant s contention that as regards the Principle of Mutuality in Service Tax matters, which is now replaced by GST, the issue is now pending before the Honorable Supreme Court of India (Constitution Bench). As such, till such time as the issue is settled by the Apex Court, the Principle of Mutuality should be extended to the levy of GST and no GST is leviable on the their activity even under the CGST Act, 2017 and the Rules made thereunder . We find that the applicant has proceeded on the assumption that there exists a principle of mutuality in their case. However, for reasons mentioned above we find that since the said principle does not exist in the case of the applicant, their request for extension of the principle to the levy of GST is not sustainable. In view of the foregoing we find that the applicant is supplying services to their Member Banks, against a consideration received from them in the form of Annual membership fees and registration fees and their supply is in
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Goods and Services Tax – Tax Evasion in Post-GST Regime – TMI Updates – Highlights
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Goods and Services Tax – GST – Dated:- 31-7-2018 – The number of cases of Tax Evasion reported post-GST regime are given in Table below: Period Detection No. of cases Amount in Crore July 2017 to June 2018 1205 3026.55 The nature of cases include misuse of Input Tax Credit, mis-declaration in the GST Returns, tax declared in GST Returns & not paid, and cases where GST returns not filed and Tax not paid. The details of number of entities claiming GST refunds based on fake invoices being repo
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Goods and Services Tax – Note on Simplified Returns and Return Formats July, 2018 – TMI Updates – Highlights
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Service Tax – Started By: – Dinesh Ghatkar – Dated:- 31-7-2018 Last Replied Date:- 31-7-2018 – Dear Sir, Thanks for your prompt response,Sir, Deptt issued us SCN and refuse under Rule 9(bb), plz suggest any circular/notification/rule under which we can fight legally,Please help.regards,Dinesh – Reply By manish kumar – The Reply = In my view no any notification/circular has been given by the department till date. So please wait for notification/circular on this issue. – Reply By Himansu Sekhar –
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Service Tax – Started By: – Dinesh Ghatkar – Dated:- 31-7-2018 Last Replied Date:- 8-10-2018 – Dear Sir/madam,We have paid Service Tax on Ocean Freight for pre-gst period after audit finding (EA-2000),but now in GST regime we can not take ITC of same, so we have applied for refund, but deptt refuse the application, on basis of we have paid Service tax of finding of Audit not willingly. hence we can not take credit not refund.Please suggest any solution.Thanks,Dinesh – Reply By KASTURI SETHI – The Reply = You must fight legally. You will get relief through Appellate channel. – Reply By Dinesh Ghatkar – The Reply = Sir,Deptt issue SCN and refuse under Rule 9(bb), plz suggest any circular/notification/rule under which we can fight legally,Ple
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in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944.) and the amount rejected, if any, shall not be admissible as input tax credit under this Act. You can claim refund if it is refundable. – Reply By Ganeshan Kalyani – The Reply = Yes, the transition provision as reproduced by my colleague expert support the view. – Reply By Rajalakshmi Ke
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Goods and Services Tax – Started By: – Deepak Gupta – Dated:- 31-7-2018 Last Replied Date:- 3-8-2018 – I AM REGISTERED PERSON UNDER GST AND MY ANNUAL TURNOVER IS MORE THAN 20 LAKH.IN MAR 2018 I HAVE RECEIVED COMMISSION ON SALE OF GOODS OF OTHER REGISTERED PERSON. IS GST APPLICABLE ON COMMISSION INCOME ?IS IT MANDATORY FOR ME TO ISSUE INVOICE ?IS I AM LIABLE TO PAY INTEREST/PENALTY ON THAT COMMISSION IN PRESENT GST RETURN ? – Reply By SHIVKUMAR SHARMA – The Reply = Yes,GST Is applicable on sales
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Note on Simplified Returns and Return Formats July, 2018 – Goods and Services Tax – GST – Dated:- 31-7-2018 – DOWNLOAD PDF – News – Press release
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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 31-7-2018 Last Replied Date:- 31-7-2018 – Backdrop Appellants in tax matters, i.e. taxpayers aggrieved by tax demands and preferring appeal before higher appellate forums, are required to deposit a specified percent of total tax demand while preferring an appeal and getting it entertained by appellate authorities. Though we have moved on to a new Goods and Services Tax (GST) regime w.e.f. July 1, 2017 and appeals in GST regime are a distant reality, appeals under Central Excise / Service Tax regime are still live and are expected to continue for next few years as fresh adjudications are still being done and most of them would lead to appeals as quality of adjudication has not improved and the orders are generally being passed without proper application of mind and at times mis-interpretation of statutory provisions besides ignoring the precedents and judicial discipline. That being the order of the day, appeals are impe
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All pending stay applications in relation to appeals filed prior to Finance Act, 2014 would continue to be governed by statutory provisions prevailing at the time of filling such stay applications/appeals. Summary of Pre-deposit Provisions w.e.f. 06.08.2014 as presently applicable Appeal filed under Section Order appealed against Appeal to Percentage of mandatory pre-deposit payable Authority 35(1) of CEA and 85 of Finance Act, 1994 Order-in-Original passed by Additional Commissioner/ Joint Commissioner, or Deputy/ Assistant Commissioner Commissioner 7.5% of demand/penalty Section 35F(i) of CEA 35B(1)(a) of CEA and 86 of Finance Act, 1994 Order-in-Original passed by Commissioner of Central Excise Cestat 7.5% of demand/penalty Section 35F(ii) of CEA 35B(1) (b) of CEA and 86 of Finance Act, 1994 Order-in-Appeal passed by Commissioner (Appeals) Cestat 10% of demand/ penalty Section 35F(iii) of CEA Recent High Court Order Delhi High Court recently had an occasion to examine the provisions
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osit, 2017 (4) TMI 1222 – CESTAT NEW DELHI (LB) , stipulating that while preferring an appeal against an order of Commissioner (Appeals), whereby the appellants are required to deposit 10% of the amount of duty and penalty imposed and confirmed separately and over and above pre-deposit of 7.5% for filing first appeal before Commissioner (Appeals) was also challenged. The High Court observed / held as follows : Charging provision of the taxing law must be strictly construed. In taxing enactment one should normally look at what is said in the provision, without reading anything into it impliedly or on the basis of presumption, for there is no room for any intendment [Federation of A.P. Chambers of Commerce of Industry v. State of A.P., 2000 (8) TMI 78 – SUPREME COURT ]. An appeal, whether first or second, is continuation of original proceedings. Further, appeal being a substantive right created by the statute can be circumscribed by the conditions imposed by the Legislature, including co
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he total tax and penalty subject matter of the appeal. It is not to ignore the pre-deposit of 7.5% already made to file first appeal. There is logic in increasing pre-deposit by 2.5% when second appeal is filed, but we would be adding words to the plain and unambiguous provision if we stipulate that 10% pre-deposit will be over and above 7.5% pre-deposit made at the time of the first appeal. Expression or words 17.5% or an additional 10% deposit instead of using mere 10% pre-deposit have not been used. Appropriateness of the meaning attached to 10% pre-deposit in the context is apparent. The success rate of departmental cases before the Tribunal is very poor. This was the reason why pre-deposit of 7.5% in case of first appeal, and 10% in case of second appeal, was required to be made. Higher deposit of 10% was justified as the demand had survived test of first appeal. Reasoning observes that the assessee would not be at loss even if they were asked to pay an additional amount of 10%, f
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shed. It was directed that the petitioner and others on filing second appeal before the Tribunal are required to deposit 10% of the amount of duty / penalty as confirmed by the first appellate authority inclusive of 7.5% per-deposit made for the first appeal. 10% would not be in addition to and over and above 7.5% of pre-deposit made for the first appeal. Cestat new Circular Vide Cestat Circular No. 1/5/Circular/Cestat/2015-CR dated 5.7.2018, in compliance to the High Court of Delhi vide order dated 31-5-2018 passed in Writ Petition (Civil) No. 4551/2017 (Santani Sales Organization v. Cestat, New Delhi 2018 (6) TMI 249 – DELHI HIGH COURT, wherein it has been decided that the appellants while preferring second appeal before the Tribunal are required to deposit 10% of the amount of duty/penalty as confirmed by the Appellate Authority inclusive of 7.5% pre-deposit made for the first appeal and that 10% would not be in addition to and over and above 7.5% of pre-deposit made for the first a
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