Month: March 2019

2019 (3) TMI 430 – NATIONAL ANTI-PROFITEERING AUTHORITY – TMI – Profiteering – printing cartridges – benefit of reduction in the GST rates not passed on – section 171 of the CGST Act, 2017 – Held that:- It is clear that anyone alleging profiteering can file a complaint. So it is not necessary that the complainant has to purchase the products, Moreover, all the details are available so the question of not considering the compliant do not arise at all. Even the MRP that is manually written happens to be correct MRP as admitted by the respondent. Therefore, the Standing Commitee has rightly forwarded the same the DGAP and the DGAP has accordingly completed its investigation and filed his report.
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In the present case, we are concerned with the supplier and the supplier is the respondent who has increased the price even after reduction of GST rate of tax. The passing of the benefit by the distributor or retailer does not rest on the fact that the manufacturer or his supplier should ha

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SHAH, TECHNICAL MEMBER Present:- Mr. Rahul Sharma and Mr. Sachin Taparia for the Applicant No. 1. Ms. Gayatri Verma, Deputy Commissioner, DGAP for the Applicant No. Ms. Sheena Saveen Sr. Manager, Deloitte, Mr. Ankit Mundra Sr. Tax Manager, Cloudtail India Pvt. Ltd., Mr. Mahesh Jaisraj CA Partner, Deloitte, and Ms. Sangita Prakash CA Manager, Deloitte for the Respondent. ORDER 1. The brief facts of the case are that under Rule 128 of the CGST Rules, 2017, a complaint dated 17.05.2018 was filed by the Applicant No. 1 against the Respondent before this Authority alleging that the Respondent had not passed on the benefit of reduction in the GST rate applicable to the printing cartridges (HSN 8443) from 28% to 18% w.e.f. 15.1 1.2017 and had increased their base price, therefore there was no reduction in the price (inclusive of GST @ 18%) charged from the recipients. In support of his allegation, the Applicant No. 1 had submitted copies of the two sale invoices of HP 678 L0S24AA Combo Pack I

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itted that the benefit of reduction in the rate of tax had not been passed on to the recipients by way of commensurate reduction in the price. The Respondent was also asked to suo-moto determine the quantum of benefit not passed on, if any, and indicate the same in his reply to the notice. The DGAP sought extension to complete the investigation, which was extended upto 07.10.2018 by this Authority vide order dated 07.09.2018 in terms of Rule 129 (6) of the CGST Rules, 2017. 4. The DGAP has also stated that, in response to the notice the Respondent vide letter dated 06.08.2018 submitted that he was a retailer and sold the products manufactured by other vendors; that he had no control over the MRP affixed by the manufacturer/ importer; that the manufacturer/ brand-owner (HP) had changed the MRP during the period between July 2017 to December 2017, that HP had first increased the MRP on account of increase in the tax rate from 5% (VAT) to 28% (GST) and also on account of imposition of Cus

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of discount would not amount to profiteering. 5. The DGAP has also informed that the Respondent had submitted the following documents: List of all GST registrations. Details of invoice-wise outward taxable supplies of the said product (other than zero rated) from 01.11.2017 to 31.07.2018 along with certified summary of the same. Copies of GSTR-1I and GSTR- 3B for the period November, 2017 to July, 2018. Copies of two sample sale and purchase invoices of the goods under investigation for the period from July, 2017 to July, 2018. The Respondent also submitted that they had not purchased this product after December, 2017. 6. The DGAP in its report has further informed that during the period between 01 .10.2017 to 31.12.2017, the Respondent had sold 16,248 units of the above product whereas the sales figure had dropped to only 251 units during the period from January, 2018 to July, 2018. An e-mail dated 06.09.2018 was sent to the Respondent by the DGAP to indicate the reasons behind such

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period 01 .10.2017 to 14.11.2017) to ₹ 887.90 (average base price for the sales made during the period 15.11.2017 to 31.07.2018). The Report has also noted that the two invoices referred above showed that the Respondent had offered similar discount of 5%, as earlier, on the increased base price after GST rate reduction w.e.f. 15.1 1.2017. Thus, by increasing the base price of the said goods and also by increasing the cum-tax price charged from the recipients post GST rate reduction, the benefit of GST rate reduction was not passed on by the Respondent to the recipients. 8. The DGAP's Report has also stated that the profiteered amount during the period w.e.f. 15.1 1.2017 to 31.07.2018 came to ₹ 10,79,813.28 The details of which are furnished in the table below:- Product Sales 01.10.2017 to 14.11.2017 (GST@28%) during Sales during 15.11.2017 to 31.07.2018 (GST@18%) Commensurate Price Profiteering (Rs.) Total Profiteering Avg. Base after Discount (Rs.) Qty. Sold Avg. Base

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2018 Mr. Rahul Sharma and Mr. Sachin Taparia appeared on behalf of the Applicant No. 1 while the DGAP was represented by Ms. Gayatri Verma, Deputy Commissioner, and the Respondent was represented by Ms. Sheena Saveen, Sr. Manager Deloitte, Mr. Ankit Mundra, Sr. Tax Manager Cloudtail India Pvt. Ltd., Mr. Mahesh Jaisraj CA, Partner Deloitte and Ms. Sangita Prakash CA, Manager Deloitte. On the request of the Respondent, further hearings were granted on 26.11.2018 and 05.12.2018. 11. The Respondent has filed detailed written submissions on 22.11.2018 and 29.11.2018. In his submissions dated 22.11.2018, referring to the DGAP Report, the Respondent has submitted that he had already filed his reply vide his letter dated 06.08.2018 before the DGAP. In addition, he had made the following submissions with respect to the Report submitted by the DGAP. He has claimed that the DGAP has framed the Report on certain assumptions which were incorrect and several key aspects and facts having bearing on t

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application is given below: 13. The Respondent has also stated that in the Letter sent to the Members of the Standing Committee on Anti-Profiteering by the Secretary (NAA) vide his letter 22011/NAA/20/2018/122, dated May 18, 2018, this fact had been reconfirmed. The Respondent has also enclosed extract of the relevant portions of the letter which is reproduced below:- Sub – Information received by NAA regarding profiteering by HP Printer- reg. Please find attached herewith a complaint against HP printers regarding increase in unit price of HP Printer canridge (via Amazon) having the unit price as ₹ 688/- on 4.10.17 and after GST reduction from 28% to 18% unit price on 09.12.2017 was ₹ 911/- 14. He has also claimed that in the Minutes of the Standing Committee Meeting held on May 25, 2018, the application filed against M/S HP Printers has been discussed and forwarded for further investigation although the above Applicant had not made any specific allegations against the Resp

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8.00 Actual price difference (42.59) 68.27 Price difference % on sales price (6.51%) 7.88% Price difference % on MRP (3.96%) 5.90% *Exclusive of GST/ taxes 15. The Respondent referring to the two invoices (shown in the table given above) filed by the Applicant No. 1 has also claimed that he had no control over the MRP affixed by the Brand owner i.e. HP India and he was just a retailer dealing with the products manufactured or imported by the brand owner. He has further claimed that the product in question had not been imported by him. Quoting the circulars of the Legal Methodology department, he has claimed that as per the provisions of the Legal Metrology Act, 2009, it was the duty of the manufacturer/ importer to determine the MRP and to affix MRP label on the products. He has further submitted that the MRP of the product was changed by HP India the brand owner on two occasions. The MRP was ₹ 1076 upto 30th June 2017 (pre-GST), from 01.07.2017 to 14.11.2017 the MRP was increase

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as well. He has further claimed that the Applicant No. 1 must have purchased the product only when the MRP of the product was ₹ 1,076 and subsequently when it was revised to ₹ 1,158 and there did not seem to be a purchase made by the Applicant when the MRP was increased to ₹ 1,239. Thus, the Applicant was unaware of the fact that there was an increase in the post-GST MRP and the sale price by HP India to ₹ 1,239 and this fact was ignored by the DGAP in his Report in spite of furnishing a certificate obtained from the brand owner about change in MRP. He has also furnished the details of pre and post GST MRPs as under:- Particulars Pre-GST Post-GST (w.e.f. 01.07.2017) Post-GST (w.e.f. 15.11.2017) Basic Customs Duty – 5% 5% Countervailing duty ( CVD ) 10%* – VAT 5% – GST – 28% 18% Effective pre-GST incidence of taxes 15.5% – Effective post-GST incidence of taxes – 34.4 23.9 Change in effective rate 18.9% (10.5%) MRP of product** 1,076 1,239 1,158 16. The Respondent

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he also submitted that in compliance with the anti-profiteering regulations, the brand owner, HP India had reduced the MRP of the product from ₹ 1,239 to ₹ 1,158, post the reduction in the rate of tax in November 2017. He has also emphasised that at no given point of time the Respondent had sold the above product at a price more than the reduced MRP of ₹ 1,158 after 14.11.2017. He has also further claimed that because of voluntary, non-binding discounts to the customers for various business reasons, the Respondent had continued to sell his product to his customers at a price lower than the reduced MRP. Based on the above facts the Respondent has claimed that he had not profiteered since the actual price of the product was well below the entitled margin. He has further claimed that discounts was his prerogative as had been decided by the Authority in the case of Flipkart (Case no 5/2018 dated July 18, 2018) = 2018 (7) TMI 1490 – NATIONAL ANTI-PROFITEERING AUTHORITY whe

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tted that at the time of transition into GST, the a stock of 1 ,067 units of the product as of July 1, 2017 and similarly HP India as well as the distributors i.e. M/s. Savex Technologies Private Ltd. and M/s. Compuage Infocom Limited would have had stock bearing pre-GST MRP of ₹ 1,076. Though the MRP was increased by the HP India from ₹ 1,076 to ₹ 1,239 on the implementation of CST on July 1, 2017, it normally took about 3-4 months for the product imported to move from HP India to the Distributors and then to the retailers to be sold finally to the end customer through the supply chain. Further, the Respondent had submitted that he had purchased 23,307 units in the month of July 2017 and August 2017 from Savex Technologies Private Ltd. and Compuage Infocom Limited at ₹ 696.78 and there was no purchase post August 14, 2017 and before the date of sale, i.e., October 4, 2017. The above two companies had stocks of the products as of July 1, 2017 which were sold to

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to ₹ 1,239 effective July 1, 2017, the continued to receive the pre-GST imported stock for a period of another 45 days and he had taken another 3 to 4 months to liquidate the opening stock as well as the purchases of pre-GST and post GST imported stock. He has further justified the fact that the Respondent had sufficient pre-GST MRP stock when the supply was made to the above Applicant by providing the stocks available with him at different points of time as is given below in the table:- Particulars Quantity Opening stock as on July 1, 2017 1,067 Quantity purchased between July 1, 2017 to August 14, 2017 at ₹ 696.98 (combination of pre-GST MRP and post-GST MRP stock) 27,625 Quantity sold upto September 30, 2017 (net of sales returns) (17,064) Stock as on September 30, 2017 11,628 Supplies made between October 1, 2017 to October 4, 2017 including supplies to the Applicant 1,166 19. He has also claimed that the above Applicant was unaware that the product sold to him during A

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798 2,013 Sales made in November 2017 (net of sales returns) (4,613) Stock as on November 30, 2017 2,899 Supplies made from December 1, 2017 to December 9, 2017 including supplies to the Applicant 753 Thus, it has been contended that because the Applicant No. 1 did not make any purchase of product with MRP of ₹ 1,239, it appeared to him that there had been an increase in the MRP. However, the fact was that the MRP had been reduced from ₹ 1,239 to ₹ 1,158. He has also produced the details of purchases as given below to substantiate his claim which is authenticated with the CA certificate. Amount in Rs. Period Total purchase cost (excluding taxes) Qty purchased Purchase price per unit* (B) (C) D = (B)/(C) July 1, 2017 to August 14, 2017 1,92,39,708 27 ,625 696.46 October 31, 2017* 6,96,460 1,000 696.46 October 25, 2017 to December 14, 2017 25,59,186 3,207 798.00 2,24,95,354 31,832 *Purchase on October 31, 2017 is pertaining to a one-off single invoice for purchases made

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n account of increase in BCD and transition stock credit benefit of CVD being passed on as per Section 140 (3) of the CGST Act, 2017. It is normal for large organization to revise their selling price to reflect such changes only on fresh stock imported/ manufactured post the rate changes and not in respect of the stock existing in the supply chain and that was probably why the purchase price was increased post mid-August 2017 as opposed to July 1, 2017 itself. 21. The Respondent has further submitted that depending upon various factors like festival sales, inventory position, competitor strategy, market penetration, customer loyalty or other similar business reasons, he had decided not to sell the product on its MRP and provided voluntary discounts/benefits to his customers for a particular duration of time. These benefits were discretionary and he was not under any statutory obligation to provide them or to withdraw them. He had analysed the price difference of the product sold to the

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0% Entitled margin 144 183 Entitled margin % on MRP 13.40% 15.83% *Price difference is solely the difference in the sale price and purchase price. This is before factoring other direct and indirect expenses. ***ExcIusive of GST/ taxes Note 1 – Invoice issued against order dated September 23, 2017 – During the Great Indian Festival sale – wherein the company gives additional discounts Note 2 – Invoice issued against order dated December 6, 2017 – During normal sales wherein discounts are offered at lower levels Actual average Price difference on sales post November 15, 2017 Amount in Rupees Particulars Amount Average selling price including taxes post-rate change (as arrived in the report based on sales made for the period November 15, 2017 to July 31, 2018) 1,047.72 Less: Taxes (GST @ 18%) 159.82 Average selling price excluding taxes 887.90 Purchase price 798.00 Price difference 89.90 Price difference % of selling price 10.3% 22. The Respondent has also stated that in the retail indust

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rofiteering would be grossly incorrect. Entitled Margin Amounts in Rs. Particulars Post GST (July 1, 2017) Post rate change (November15, 2017) MRP 1 ,239.00 1,158.00 Price without tax 967.97 981.36 Procurement price 798.00 798.00 Entitled margin 169.97 183.36 Entitled margin % of MRP 14% 15.83% Entitled margin % on selling price 17.56% 18.68% 23. The Respondent has also re-iterated that the invoices under consideration in the notice had been raised under two different circumstances. While the first invoice dated 04.10.2017 reproduced below was raised during the festive promotion sale, the other has been raised during a period where he was operating at business as usual . The invoice under question pertained to the sale made by him during a promotional event run by Amazon, which was conducted between September 21, 2017 and September 24, 2017. The invoice provided by the above Applicant had clearly captured the order date as September 23, 2017, which fell within the duration of the Great

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should consider the fact that on an online marketplace where it was common practice to issue discounts, the fact that the product was a discounted one should not be ignored. 25. It is also submitted that the procurement price had increased from ₹ 696 to ₹ 798 in the month of October 2017, and if the Respondent had continued to sell at the average base price of ₹ 705.90, as envisaged by the DGAP, he would have incurred a loss. For the 5,028 units sold by him during the period November 15, 2017 to July 31, 2018, they would have incurred a loss of ₹ 4,62,576 as could be seen from the table below:- Amount In Rs. Particulars Amount Average base price pre-rate change (as arrived in the report based on sales made for the October 1, 2017 to November 14, 2017) 705.90 Purchase price 798.00 Margin (92.00) 26. He has also submitted that the DGAP had ignored the fact that the copy of the application filed along with the copies of the invoices, made available to him, did not

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ded to pursue the application further. This submission made by him to the reply to the notice issued by the DGAP had been ignored in the Report. 27. He has further submitted that the Report has erred in the methodology adopted for computation of the profiteering amount. He has further submitted that the average base price per unit for the period prior to the rate change had been computed based on the sale data for 1.5 months alone. The amount has been arrived at based on sales details for the period October 1, 2017 to November 14, 2017 alone, as could be seen from the table given below. Instead the average base price per unit for the period prior to the rate change should have been calculated on all the sales made from July 1 , 2017 to November 14, 2017. The average base price per unit in respect of sale of the product from July 1, 2017 to November 14, 2017 was ₹ 710.78 and not 705.90, as has been stated in the DGAP Report and out of the 5,028 units sold between November 15, 2017

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eering Average base price after discount Qty. Sold Average base price after discount Qty. Sold Actual selling price B C D E F=118% of D G-118% of B H=[F-G] 705.90 11471 887.90 5028 1047.72 832.96 214.76 28. The Respondent has contended that the profiteered amount should be calculated on the basis of the difference between the commensurate base price and the average base price after discount without considering the tax element as the differential tax element has anyway been deposited by him with the Government on a monthly basis as had been declared in the GST returns. Instead the formula in Column H should have been H=D-B instead of H=F-G . Further, it has been submitted that the Report had not considered the sales returns. If all these submissions were considered, he has claimed that the amount profiteered, if any, should be restricted to ₹ 7,82,425.60. The revised amount as given in Table B with the exact amount of profiteering is shown below:- 1. Reduction in amount profiteere

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iteered 9,15,096.00 8,91,263.28 *Based on sales made between November 15, 2017 to July 31, 2018 **Based on sales made between October 1, 2017 to November 14, 2018 ***Based on sales made between July 1, 2017 to November 14, 2018 3. Reduction in amount profiteered after considering sales returns Amount in Rs. Particulars Amount Amount Average base price per unit after discount* (A) 887.90 887.90 Average base price per unit after discount** (B) 710.78 710.78 Profiteering per unit 177.26 177.26 Quantity sold 5,028 4,414 Total amount profiteered 8,91,263.28 7,82,425.60 *Based on sales made between November 15, 2017 to July 31, 2018 * *Based on sales made between July I, 2017 to November 14, 2018 Rectified table as provided by the Respondent Product Sales during 1.10.17 to 14.11.17 (GST @28%) Sales during 15.11.17 to 31.07.18 (GST@18%) Commensurate price Profiteering Total profiteering (Rs.) Average base price after discount Qty. Sold Average base price after discount Qty. Sold Actual sellin

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rding the MRP of the product in the complaint while the MRP had been manually mentioned, after confirming that the Applicant was not a purchaser of the goods. He once again emphasised that Section 128 required every Application filed must be complete in all respects. An application filed without sufficient proof or purchase could not be considered a valid application. In the current proceedings, the Application filed was with respect to an alleged increase in MRP of the product. He has also submitted that the above Applicant neither in the complaint nor during the hearing has provided any proof regarding the MRP which he had disputed. The Applicant had merely manually mentioned the MRP after confirming that he had not even purchased the goods. The Respondent has also reproduced the extract of the sale details (reproduced below) where manual MRP has been mentioned and stated that the details of the order placed, pack shot etc. were key factors to determine the facts of the case. 30. He

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as made out. b. With regard to the Respondents submission that the applicant had not provided any proof regarding the MRP of the product disputed in the complaint and that MRP had been manually mentioned, even after confirming that the applicant isn't a purchaser of the goods, the DGAP quoting Rule 129 (1) of the CGST Rules, 2017, has stated that the present complaint was examined by the Standing Committee in its meeting held on 25.05.2018, wherein the complaint was found fit for investigation and it was decided to forward the same to the DGAP for investigation. c. The complainant had enclosed copies of invoices issued by the Respondent since the transaction invoice was issued by M/s. Cloudtail India Pvt. Ltd., the investigation was carried out against the Respondent. With regard to the issues that MRP was decided by the brand owner and there had been change in MRP post GST implementation, the DGAP submitted that the profiteering has been calculated on the transaction value (after

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m ₹ 705.90 (average base price for the sales made during the period 01.10.2017 to 14.11.2017) to ₹ 887.90 (average base price for the sales made during the period 15.11.2017 to 31.07.2018). He has also stated that it was the Respondent's own statutory responsibility and obligation to pass on the benefit of reduction in the GST rate to his customers and the Respondent was required to sell the said goods at the pre 15.11.2017 base price and charge lower GST @ 18% on such base price. He has also mentioned that the issue of change in MRP was not taken into consideration for profiteering calculation. e. With regard to the issue that the average base price per unit for the period prior to rate change should have been considered based on sales data for the period 01.07.2017 to 14.1 1 .2017, the DGAP has submitted that Section 171 (1)of the Central Goods and Service Tax Act, 2017 required that a reduction in rate of tax on any supply of goods or services or the benefit of input

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revision) could not be determined. 32. We have considered the Report of the DGAP and the submissions made by the Respondent and other materials placed on record. The mandate of the Authority as per Section 171 of the CGST Act, 2017 read with Rule 127 of the CGST Rules, 2017 is to examine and determine as to whether- i) any reduction in rate of tax on any supply of goods or services or the benefit of ITC has been passed on to the recipient by way of commensurate reduction in prices, ii) to identify the registered person who has not passed on the benefit of reduction in the rate of tax on supply of goods or services or the benefit of ITC to the recipient by way of commensurate reduction in prices. 33. The Respondent has raised the following objections on the complaint itself which are being dealt in the following paras:- (i) Firstly, the Respondent, as discussed in para 12 to 14 above, has submitted that the proceedings initiated should be deemed infructuous as the complaint under Secti

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al purchaser and the claim of the Applicant stands invalidated as crucial details were missing and the MRP was also written manually. Rule 128 (2) of the CGST Rules, 2017, reads All applications from interested parties on issues of local nature shall first be examined by the State level Screening Committee and the Screening Committee shall, upon being satisfied that the supplier has contravened the provisions of Section 171, forward the application with its recommendations to the Standing Committee for further action . Further Rule 137 (c) of the CGST Rules reads that interested party includes- a. suppliers of goods or services under the proceedings; and b. recipients of goods or services under the proceedings; c. any other person alleging, under sub-rule (1) of rule 128, that a registered person has not passed on the benefit of reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices.

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by Section 171 of the CGST Act, 2017, to pass on the benefit of reduction in tax. In the present case, we are concerned with the supplier and the supplier here is the Respondent who has increased the price even after reduction in the GST rate of tax. The passing of the benefit by the distributor or retailer does not rest on the fact that the manufacturer or his supplier should have passed on the same benefit to him first. 36. The Respondent has further alleged that when the two invoices filed by the Applicant were compared, it appeared that the Applicant must have purchased the product only when the MRP of the product was ₹ 1,076 and subsequently, when it was revised to ₹ 1,158 and it seemed that there was no purchase made by the Applicant when the MRP was increased to ₹ 1,239. Thus, the Applicant was unaware of the fact that there was an increased post-GST MRP and sale price by HP India to ₹ 1,239 and this fact was ignored by the DGAP in his Report. Therefore,

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This statistics itself clearly shows that when the MRP reduced from ₹ 1 , 239 to ₹ 1,158, the procurement price remaining the same and with GST rate of tax being reduced from 28% to 18%, the Respondent had increased his selling price by ₹ 13.39 per unit and on this increased price GST of 18% has also been collected. As claimed by the Respondent he could not take advantage of the reduction in the rate of tax to increase his profit margins. The benefit of reduction in rate of tax has to be necessarily passed on to the recipients. Moreover, the DGAP has rightly taken the transaction value of the supplier which was the price that was charged by the Respondent from his recipients which excluded the impact of discounts. 37. The Respondent has further submitted that there had been an increase in the procurement price after introduction of GST with rate of tax being 28% on the products in question. The rate of change of tax from 28% to 18% had been w.e.f. 15.11.2017. Therefor

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hence the contention of the Respondent made in this behalf cannot be accepted. With regard to the sale returns of 614 units the Respondent has not filed any documentary proof to show that these units were supplied and returned during the period in question. Hence, the benefit of these units cannot be extended. 38. The contention of the Respondent that the DGAP has arrived at the profiteered amount by taking into account the cum tax prices and he should have taken the average base price without tax since the tax amount had already been paid to the Government, does not hold good as already discussed, the Respondent has not only increased his base price but has also collected GST on the increased base price. The recipient has to be given the benefit of the increased base price and the increased tax collected from him. Therefore, the profiteered amount is arrived at as shown in the table below. Product Sales during 01.07.2017 to 14.11.2017 (GST @28%) Sales during 15.11.2017 to 31.07.2018 (

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of ₹ 10, 79,813.28 in the Consumer Welfare Fund of the Centre and the respective States as per the provisions of Rule 133 (3) (c) of CGST Rules, 2017. Further the Respondent is directed to deposit the above amount as per the provisions of Rule 133 (3) (c) in the ratio of 50:50 in the Central and the State Consumer Welfare Funds. Accordingly the Respondent is directed to deposit an amount of ₹ 5,39,906.64 in the Central CWF and the balance in the State CWFs as given below. The above amount shall be deposited within a period of 3 months from the date of receipt of this order. S. No State Qty Nos. Profiteering per Unit Profiteering by the states Rs. 1 Andaman & Nicobar 3 214.76 322.14 2 Andhra Pradesh 75 214.76 8053.50 3 Arunachal Pradesh 3 214.76 322.14 4 Assam 16 214.76 1718.08 5 Bihar 27 214.76 2899.26 6 Chandigarh 18 214.76 1932.84 7 Chattisgarh 15 214.76 1610.70 8 Goa 41 214.76 4402.58 9 Gujarat 165 214.76 17717.70 10 Haryana 283 214.76 30388.54 11 Himachal Pradesh 1

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GST – 14/2019 Central GST (CGST) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 14/2019 – Central Tax New Delhi, the 7th March, 2019 G.S.R. 196 (E).- In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act),and in supersession of the notification no 8/2017- Central Tax, dated the 27th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 647 (E), dated the 27th June, 2017, except as things done or omitted to be done before such supersession, the Cen

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i) Tripura, (viii) Uttarakhand: Provided further that the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below 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, namely:- TABLE Sl. No. Tariff item, sub-heading, heading or Chapter Description (1) (2) (3) 1. 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa. 2. 2106 90 20 Pan masala. 3. 24 All goods, i.e. Tobacco and manufactured tobacco substitutes. Explanation. – (i) In this T

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GST – 13/2019 Central GST (CGST) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 13/2019 – Central Tax New Delhi, the 7th March, 2019 G.S.R. 195 (E).- In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), the Commissioner, on the recommendations of the Council, hereby specifies that the return in FORM GSTR-3B of the said rules for each of the months from April, 2019 to June, 2019,

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GST – 12/2019 Central GST (CGST) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 12/2019 – Central Tax New Delhi, the 7th March, 2019 G.S.R. 194 (E). – In exercise of the powers conferred by the second proviso to sub-section (1) of section 37 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Commissio

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GST – 11/2019 Central GST (CGST) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 11/2019 – Central Tax New Delhi, the 7th March, 2019 G.S.R. 193 (E).- In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Central Government, on the recommendations of the Council, hereby notifies the registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year, as the class of registered persons, who shall follow the special procedure as mentioned below for furnishing

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GST – 10/2019 Central GST (CGST) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Notification No. 10/2019-Central Tax New Delhi, the 7th March, 2019 G.S.R 190 (E).- In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter referred to as the said Act ), the Central Government, on the recommendations of the Council, hereby specifies the following category of persons, as the category of persons exempt from obtaining registration under the said Act, namely,- Any person, who is engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed forty lakh rupees, except, – (a) persons requi

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GST – 02/2019-Central GST (CGST) Rate – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Notification No. 2/2019-Central Tax (Rate) New Delhi, the 7th March, 2019 G.S.R. 189 (E).- In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (herein after referred to as the said Act ), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of goods or services or both as specified in column (1) of the Table below, shall be levied at the rate specified in the corresponding entry in column (2), subject to the conditions as specified in the corresponding entry in column (3) of the said table below, namely:- Table Description of supply Rate (per cent.) Conditions (1) (2) (3) First s

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may be, as specified in the corresponding entry in column (2) of the said annexure. 2.Where more than one registered persons are having the same Permanent Account Number, issued under the Income Tax Act, 1961(43 of 1961), central tax on supplies by all such registered persons is paid at the rate specified in column (2) under this notification. 3. The registered person shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. 4. The registered person shall issue, instead of tax invoice, a bill of supply as referred to in clause (c) of sub-section (3) of section 31 of the said Act with particulars as prescribed in rule 49 of Central Goods and Services Tax Rules 5. The registered person shall mention the following words at the top of the bill of supply, namely: – taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies . 6. The registered perso

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mination of tax payable under this notification shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act. ANNEXURE Sl. No. Tariff item, sub-heading, heading or Chapter Description (1) (2) (3) 1 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa. 2 2106 90 20 Pan masala 3 24 All goods, i.e. Tobacco and manufactured tobacco substitutes 2. In computing aggregate turnover in order to determine eligibility of a registered person to pay central tax at the rate of three percent under this notification, value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account. 3. Explanation. -For the purpose of this notification, – (i) tariff item , sub-heading , heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapters speci

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GST – 02/2019 Union Territory Tax – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Notification No. 2/2019- Union Territory Tax New Delhi, the 7th March, 2019 G.S.R 192 (E).- In exercise of the powers conferred by clause (vi) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter referred to as the said Act ), the Central Government, on the recommendations of the Council, hereby specifies the following category of persons, as the category of persons exempt from obtaining registration under the said Act, namely,- Any person, who is engaged in exclusive supply of good

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GST – 02/2019 Union Territory Tax (Rate) – Dated:- 7-3-2019 – Government of India Ministry of Finance (Department of Revenue) Notification No. 2/2019- Union Territory Tax (Rate) New Delhi, the 7th March, 2019 G.S.R. 191 (E).- In exercise of the powers conferred by sub-section (1) of section 7, sub-section (1) of section 8, clause (v) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (herein after referred to as the said Act ), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the Union Territory Tax, on the intra-State supply of goods or services or both as specified in column (1) of the Table below, shall be levied at the rate specified in the corresponding entry in column (2), subject to the conditions as specified in the corresponding entry

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cified in column (3) of the Annexure below 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 annexure. 2.Where more than one registered persons are having the same Permanent Account Number, issued under the Income Tax Act, 1961(43 of 1961), union territory tax on supplies by all such registered persons is paid at the rate specified in column (2) under this notification. 3. The registered person shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. 4. The registered person shall issue, instead of tax invoice, a bill of supply as referred to in clause (c) of sub-section (3) of section 31 of the said Act with particulars as prescribed in rule 49 of Central Goods and Services Tax Rules. 5. The registered person shall mention the following words at the top of the bill of supply, namely: – taxable person paying tax in term

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clude the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the said Act but for the purpose of determination of tax payable under this notification shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act. ANNEXURE Sl. No. Tariff item, sub-heading, heading or Chapter Description (1) (2) (3) 1 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa. 2 2106 90 20 Pan masala 3 24 All goods, i.e. Tobacco and manufactured tobacco substitutes 2. In computing aggregate turnover in order to determine eligibility of a registered person to pay union territory tax at the rate of three percent under this notification, value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account. 3. Expl

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GST – 92/11/2019 – Dated:- 7-3-2019 – Circular No. 92/11/2019-GST F. No. 20/16/04/2018-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 7th March, 2019 To, The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All) The Principal Director Generals/Director Generals (All) Madam/Sir, Subject: Clarification on various doubts related to treatment of sales promotion schemes under GST – Reg. Various representations have been received seeking clarification on issues raised with respect to tax treatment of sales promotion schemes under GST. To ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act ) hereby clarifies the issues in succeeding paragraphs. 2. It h

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r furtherance of business. Therefore, the goods or services or both which are supplied free of cost (without any consideration) shall not be treated as 'supply' under GST (except in case of activities mentioned in Schedule I of the said Act). Accordingly, it is clarified that samples which are supplied free of cost, without any consideration, do not qualify as 'supply' under GST, except where the activity falls within the ambit of Schedule I of the said Act. ii. Further, clause (h) of sub-section (5) of section 17 of the said Act provides that ITC shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Thus, it is clarified that input tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration. However, where the activity of distribution of gifts or free sam

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entire supply. It can at best be treated as supplying two goods for the price of one. ii. Taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the said Act. iii. It is also clarified that ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply of goods or services or both as part of such offers. C. Discounts including Buy more, save more offers: i. Sometimes, the supplier offers staggered discount to his customers (increase in discount rate with increase in purchase volume). For example- Get 10 % discount for purchases above ₹ 5000/-, 20% discount for purchases above ₹ 10,000/- and 30% discount for purchases above ₹ 20,000/-. Such discounts are shown on the invoice itself. ii. Some suppliers also offer periodic / year ending discounts to their stockists, etc. For example-

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utable to the discount on the basis of document (s) issued by the supplier. iv. It is further clarified that the supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts. D. Secondary Discounts i. These are the discounts which are not known at the time of supply or are offered after the supply is already over. For example, M/s A supplies 10000 packets of biscuits to M/s B at ₹ 10/- per packet. Afterwards M/s A re-values it at ₹ 9/- per packet. Subsequently, M/s A issues credit note to M/s B for ₹ 1/- per packet. ii. The provisions of sub-section (1) of section 34 of the said Act provides as under: Where one or more tax invoices have been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are re

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GST – Started By: – SHARAD ANADA – Dated:- 6-3-2019 Last Replied Date:- 12-3-2019 – Can a main contractor avail ITC on cement and other materials and capital goods used for construction of road , Dam, etc services provided to Govt. Or it's a block credit U/s 17(5)(c) of CGST Act 2017. Can sub contractor avail ITC on cement and other materials and capital goods used for construction of Road, Dam etc services provided to main contractor who in turn provide services to Govt. Or it's blocked credit u/s 17(5)(c) of cgst act 2017 Can main contractor avail ITC on bills raised by sub contractor? Same issue regarding commercial construction or residential construction to private builder? – Reply By Pavan Mahulkar – The Reply = Input Tax Cre

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immovable property; So, Principal Contractor can avail credit in terms of Works contact services availed from subcontractor as it is used for further supply of works contract service and not blocked u/s 17(5)(c) Principal Contractor or Subcontractor never used goods or services or both on own account Rather they use the same for transferring to employer/Principal contractor Hence ITC not blocked u/s 17(5)(d) So in all the scenario mentioned by you either the WC services are provided to Government or for commercial or resedential construction ITC is available unless the said supply is exempted – Reply By Pavan Mahulkar – The Reply = Further Principal contractor or subcSubcontra never capitalize the immovable property constructed As it has b

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GST – States – CCT/26-2/2018-19/45/4397 – Dated:- 6-3-2019 – GOVERNMENT OF GOA Department of Finance Notification CCT/26-2/2018-19/45/4397 In exercise of the powers conferred by section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) (hereafter in this notification referred to as the said Act) read with sub-rule (5) of rule 61 of the Goa Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), the Commissioner, on the recommendations

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GST – States – CCT/26-2/2018-19/44/4396 – Dated:- 6-3-2019 – GOVERNMENT OF GOA Department of Finance Office of the Commissioner of Commercial Taxes Notification CCT/26-2/2018-19/44/4396 In exercise of the powers conferred by the second proviso to sub-section (1) of section 37 read with section 168 or the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) (hereafter in this notification referred to as the said Act), the Commissioner, on the recommendations of the Council, hereby extends th

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2019 (3) TMI 516 – CESTAT HYDERABAD – TMI – Valuation – mis-declaration of value – job-work – inclusion of amount paid by appellant no.2 as royalty to their parent concern in the value for discharging the central excise duty – period 2004-05 to 2007-08 – time limitation – Held that:- Undisputedly appellant is a job worker for appellant no. 2; manufactures Vicks Action 500 and Vicks Inhalers; discharges the duty liability on the said products based upon the formula of valuation as settled by the Apex Court in the case of Ujagar Prints [1989 (1) TMI 124 – SUPREME COURT OF INDIA] i.e. cost of materials plus job work charges (which includes job workers profit); filed regularly the cost sheets, declarations etc., with the authorities as being job worker of the appellant no.2.
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In the absence of any knowledge of any payment made by appellant no. 2 to Procter & Gamble, USA, it cannot be held that appellant had misdeclared the value of the goods manufactured on job work basis. Further, i

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king the extended period for demanding the duty for the period 2004- 05 to 2007-08 is blatantly hit by limitation.
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Appeal allowed – decided in favor of appellant. – Appeal No: E/574 & 575/2010 Dated:- 6-3-2019 – Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Vipin Verma, Advocate for the Appellant(s). Ms. B.V. Siva Naga Kumari & Shri Bhanu Kiran (ARs) for the Respondent. ORDER Per: M.V. Ravindran 1. These two appeals are directed against Order-in-Original No.19/2009-CE-Commr-HYD III/ADJN dated 11-12-2009. Since both the appeals are interconnected they are being disposed of by a common order. 2. The relevant facts that arise for consideration after filtering out unnecessary details are appellant (M/s Elegant Chemicals Enterprises Pvt Ltd.,) is engaged in the manufacture of Vicks Action 500 tablets and Vicks Inhaler as a job worker for appellant no.2 (Procter & Gamble Hygiene and Healthcare Limited) on job work basis. The job work agr

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dated 03-08-2009 was issued for demand of the duty for the period 2004-05 to 2007-08, demanding interest and also seeking to impose equivalent penalty on the appellant and penalty on appellant no.2. Both the appellants contested the show cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, confirmed the demands raised with interest and also imposed penalties on both the appellants. 3. Learned Counsel submits after giving overall facet of the case submits the sequence of events which are reproduced as under: Date Event 19.09.2005 to 22.09.2005 Audit conducted by C & AG 13.10.2006 to 18.10.2006 Audit conducted A.G s Audit Party 12.11.2007 to 15.11.2007 Audit conducted A.G s Audit Party November, 2007 Audit by the Central Excise Audit Group December, 2008 Audit by the Central Excise Audit Group 16.04.1999 SCN issued to the Appellant demanding differential duty on job work valuation 27.09.2005 Appellant submitted details that t

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a proposal to demand differential excise duty on the ground that the valuation is to be done in terms of Rule 10A of the Vauation Rules for the period April 2007 onwards. 30.04.2009 OIO passed adjudicating the SCN dated 06.11.2008 confirming the demand 18.12.2018 Tribunal confirmed the OIO dated 30.04.2009 upholding the demand under Rule 10A for the period April 2007 to February 2008 It is his submission that the show cause notice seeking differential duty demand for the period in question is repetitive and of periodical one as earlier as show cause notices were issued. It is his submission that the valuation method adopted by the appellant for discharge of central excise duty on the goods manufactured and cleared as job worker is in terms of the decision of the Apex Court in the case of Ujagar Prints Vs Union of India [1989 (3) ELT 493 (SC)]. It is his submission that it can be seen from the table that there is overlapping of the demands in the case in hand. He would submit that it i

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rred by limitation in as much, the job work arrangement between appellant and appellant no.2 is within the knowledge of department since 1999, as a valuation dispute itself was raised on the goods manufactured on job work basis; there were regular audits conducted by the departmental authorities and C & AG department wherein job work agreement, manner of valuation of goods, has been examined and no demands were raised. It is his submission that for the period April 2003 – March 2007, proceedings were initiated against the appellant and method valuation adopted for job work manufactured goods is on record the copy of the Order-in-Original dropping demand is enclosed along with the appeal memoranda, and the said order is not contested by the Revenue. It is his further submission that as an alternative, the calculation of the demands is also incorrect as it has not considered the value of the goods cleared under Section 4A i.e. for the items Vicks Action 500 when they were brought int

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impugned order. 4. Learned Principal Commissioner (AR) after giving small picture of the activity undertaken by appellant submits that appellant no. 2 paid royalty charges to Procter & Gamble, USA and that value needs to be included in the value for discharging of central excise duty. She would submit that as per technical know-how and trade mark agreement dated 01.12.2004, between Procter & Gamble, USA and appellant no. 2, there is a transfer of manufacturing technology and know-how and trade mark for which royalty and technical fees are paid. It is the submission that once these amounts are paid towards royalty and technical fees, they have to become a part of assessable value as per the provisions of Section 4 r/w relevant rules of the valuation rules. She would gainfully refer to CBEC No. 619/10/2002 dated 19.02.2002 and submits that it was clarified so. It is her submission that the assessee contended that Rule 6 is not applicable as there is no additional consideration i

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ical submission of cost sheets with the authorities, method in which cost of production was arrived as per manufacturing agreement between appellant and appellant no. 2 was also considered in its correct perspective and has come to a conclusion that the duty liability arises. 5. Considered the submissions made by both sides and perused the records. 6. It transpires from the records that the demand of the differential central excise duty on the appellant and imposition of penalty on appellant no. 2 is based upon the allegation and the findings that appellant no.1 has misdeclared the value of the goods cleared by them. 7. Undisputedly appellant is a job worker for appellant no. 2; manufactures Vicks Action 500 and Vicks Inhalers; discharges the duty liability on the said products based upon the formula of valuation as settled by the Apex Court in the case of Ujagar Prints i.e. cost of materials plus job work charges (which includes job workers profit); filed regularly the cost sheets, de

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ought on record that appellant was aware of payment of royalty charges and technical fees by appellant no.2 to Procter & Gamble, USA and nor there is any allegation in the show cause notice that indicate so. In our view, in the absence of any knowledge of any payment made by appellant no. 2 to Procter & Gamble, USA, it cannot be held that appellant had misdeclared the value of the goods manufactured on job work basis. Further, in the entire proceedings, the Revenue has not disputed that appellant had been filing cost sheets along with the declaration made by appellant no.2 when they manufactured and cleared Vicks Action 500 and Vicks Inhalers from their factory premises. If that be so, alleging that there was a misdeclaration of the value in the case in hand seems to be unfounded and incorrect. 10. Secondly, reading the Apex Court Judgment in the case of Ujagar Prints the discharge of the duty liability by the appellant based upon the cost of material plus job works charges dur

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2019 (3) TMI 515 – CESTAT CHENNAI – TMI – Validity of SCN – Suppression of facts – extended period of limitation – Held that:- The SCN is not ipso facto adjudication; just a proposal which culminates in the adjudication order and during the adjudication proceedings, the adjudicating authority looks into all aspects of law, facts and explanations offered by the assessee, the final order and the demand follows thereafter and hence the arguments of the Ld. Consultant that for proposing entire demand, in the SCN itself is bad, cannot be accepted and hence, the same is rejected.
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One hand, appellant claims that there was no suppression, longer period of limitation should not have been invoked; on the other hand it doesn’t explain difference in closing stock as at the end of the year and the opening stock as of next year. On being pointed out, it admits the duty liability but gives a working as to correct duty liability. Had there not been the show cause notice, the appellant would not

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, 2004 (CCR, 2004) the appellant is required to reverse the Cenvat credit involved on the closing stock of inputs and inputs contained in the finished goods available as on 31.03.2005 and after deducting such amount, credit if any, still remaining, shall lapse. It was alleged by the Revenue that the assessees have not correctly reversed the credit involved in the inputs lying in stock or raw materials in process or finished product as on 01.04.2005 when they opted for availing the benefit of exemption notification. Hence, a Show cause notice dated 09.01.2008 was issued proposing recovery of short payment of duty, interest and penalty under Rule 15(2) of CCR, 2004 read with Section 11 AC of Central Excise Act, 1944. On adjudication, proposals made in the SCN were confirmed and on appeal, the Commissioner (Appeals) rejected the appeal. On further appeal before the Tribunal the matter was remanded to the Commissioner (Appeals) for denovo consideration in the light of specific directions v

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rly, suppression cannot be alleged and the demand is clearly hit by limitation. The Commissioner (Appeals) has not even considered the Board s Master Circular No. 1053/2017-CX dated 10.03.2017, where in it has been clarified that extended period can be invoked only when there are ingredients necessary to justify the demand for the extended period in a case leading to short payment or non-payment of tax. Hence, the onus of establishing these ingredients lies on the Revenue for invoking extended period. Ld. Consultant submitted that Hon ble Supreme Court, Hon ble High Courts and Tribunals have consistently held in the following cases that when assessee is opting for exemption under Notification No. 8/2003, the assessee needs to reverse only the unutilized credit balance on the relevant date and once input credit is taken legally it cannot be denied after the issue of exemption notification. He relied on the following case laws in support of his contentions wherein similar view has been e

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ied on the findings in the impugned order and requested for upholding the same. 4.1 I have heard the rival submissions and have gone through the case laws cited by the Ld. Consultant. The SCN is not ipso facto adjudication; just a proposal which culminates in the adjudication order and during the adjudication proceedings, the adjudicating authority looks into all aspects of law, facts and explanations offered by the assessee, the final order and the demand follows thereafter and hence the arguments of the Ld. Consultant that for proposing entire demand, in the SCN itself is bad, cannot be accepted and hence, the same is rejected. 4.2. I have also gone through the explanation filed by the assessee vide acknowledgement dated 13.03.2008in response to the SCN which is filed along with the appeal memorandum at pages 42-44. In the second page i.e., at running page 43, appellant admits that …….the value for the purpose of calculation if duty should only be on the basic value of

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proposition that there was no suppression or that invoking extended period was wrong. 4.4 Further, in the subsequent paragraph/s appellant also indicates that on account of quality issues some of the material manufactured was rejected by its customer and the same was held back it its stock, with the following explanation: ….therefore, we may have to apply for destruction of this quantity…. If in case we apply for destruction of this material the excise duty involved on the proportionate quantity of raw materials contained therein will be reversed at the time of destruction….. 4.5 Much after this, as noted by the adjudicating authority, appellant did not file any documentary evidence to prove either the destruction as of above, or the reversal as indicated by it in its reply extracted above. Even if it is to be accepted that the reversal would depend on destruction, learned Commissioner (Appeals) in the impugned order observes at paragraph 8 as under:- …. As

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on 31.03.2005 as indicated by the appellant vide its letter dated 01.04.2005 was ₹ 1,03,975/-. On verification of P & L account of the appellant, the closing stock as on 31.03.2005 was ₹ 17,47,361/- as against the actual figure informed to the revenue. I find from their reply that there is no dispute raised as to the above findings of such a serious mismatch between the closing stock and opening stock, but still works out the balance if any, to be paid as indicated in the earlier paragraphs. 5. One hand, appellant claims that there was no suppression, longer period of limitation should not have been invoked; on the other hand it doesn t explain difference in closing stock as at the end of the year and the opening stock as of next year. On being pointed out, it admits the duty liability but gives a working as to correct duty liability. Had there not been the show cause notice, the appellant would not have come forward so gratefully, as there would not have arisen any oc

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2019 (3) TMI 514 – CESTAT NEW DELHI – TMI – Utilization of CENVAT credit – carriage inward – financial year 2007-08 to 2009-10 – Whether a manufacturer having credit balance in his account can utilize that credit for payment of Service Tax on goods transport by road? – Rule 3 (4) of CCR – time limitation – scope of SCN – Held that:- CENVAT Credit can be utilized for payment of Service Tax on any output service – Thus, the reasoning of the adjudicating authority that since GTA do not qualify to be an output service as such is not eligible for Cenvat Credit. Hence payment of Service Tax thereof cannot be made from the accumulated Cenvat Credit is opined as incorrect. Though there are several other proviso attached to this sub-rule (4) but none of those provisos are applicable to the given situation.
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There is an explanation that CENVAT credit cannot be utilized for payment of service tax in respect of services where the person liable to pay tax is the service recipient. But this ex

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iscussion, the order under challenge is held not sustainable.
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Appeal allowed – decided in favor of appellant. – Excise Appeal No. E/52018/2018-EX [SM] – Final Order No. 50315/2019 – Dated:- 6-3-2019 – MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Present for the Appellant: Mr. Satish Chandra, Prop. Present for the Respondent: Mr. P. Juneja, DR ORDER PER: RACHNA GUPTA Present is an appeal preferred against the order of Commissioner (Appeals) bearing No.252 dated 18.04.2018. The said order is the adjudication to show cause notice No.30179 dated 08.06.2010, which was issued when during the course of audit, Department observed that the appellant has incurred expenses as carriage inward in the financial year 2007-08 to 2009-10 on which the service tax has been paid from the available inputs credit accounts. Denying goods transport agency to be an output service, that the Department proposed recovery of service tax for ₹ 1,06,782/- for period 2007-2010 (upto 31.12.2009) alongwith the inte

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liable to be set aside. 2. While rebutting these arguments, It is submitted by the Department that there is no infirmity in the order under challenge, which is based on the Circular dated 23.08.2007 titled as procedural issues in Service Tax – Circular . It is impressed upon that the Circular includes the issue relating to availment and utilization of cenvat credit clarifying that since the service provided by a goods transport agent for which the consigner or consignee is made liable to pay Service Tax, it does not become an output service for such consigner or consignee. Therefore, the Service Tax payable by the consigner or consignee on transportation of goods by road cannot be paid through credit accumulated by such consigner or consignee. Appeal is accordingly prayed to be dismissed. 3. After hearing both the parties, I am of the opinion as follows:- 4. The question to be adjudicated in the present appeal is: Whether a manufacturer having credit balance in his account can utilize

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output service as such is not eligible for Cenvat Credit. Hence payment of Service Tax thereof cannot be made from the accumulated Cenvat Credit is opined as incorrect. Though there are several other proviso attached to this sub-rule (4) but none of those provisos are applicable to the given situation. 5.1 In addition, there is an explanation that cenvat credit cannot be utilized for payment of service tax in respect of services where the person liable to pay tax is the service recipient. But this explanation got incorporated in this Rule vide Notification No.28 dated 20th June, 2012 with effect from 1st July, 2012. The period here is 2007-08 to 2009-10. Hence, the explanation cannot be made retrospectively applicable to the impugned period for which the above condition holds a good law that cenvat credit may be utilized for payment of Service Tax on any output service (including GTA service). Hon ble High Court of Punjab & Haryana in the case of CCE vs. M/s. Nahar Industrial Ente

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2019 (3) TMI 432 – GUJARAT HIGH COURT – TMI – E-way bill – confiscation of goods – Procedure to be followed in case where any goods are in transit in contravention of the provision of the Act or the rules made thereunder – Held that:- The attention of the court was invited to the impugned show cause notice dated 1.3.2019, to submit that the same seeks to impose penalty, redemption fine and confiscation under section 130 of the Act without initiating any proceedings under section 129 of the Act, which is not permissible in law – Issue Notice returnable on 8th March, 2019. – R/SPECIAL CIVIL APPLICATION NO. 4730 of 2019 Dated:- 6-3-2019 – MS HARSHA DEVANI AND MR BHARGAV D. KARIA, JJ. For The Petitioner (s) : MR UCHIT N SHETH (7336) For The R

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order thereunder. It was submitted that it is only if there is no compliance of the order passed under section 129 of the Act, that the provisions of section 130 of the IGST Act can be resorted to. The attention of the court was invited to the impugned show cause notice dated 1.3.2019, to submit that the same seeks to impose penalty, redemption fine and confiscation under section 130 of the Act without initiating any proceedings under section 129 of the Act, which is not permissible in law. It was further submitted that the integrated goods and services tax has already been paid on the goods in question at the time of import thereof and that the goods in question are perishable goods with a limited shelf-life. 2. Having regard to the submis

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GST – Cancellation of GST registration – non filing of returns of returns – Revenue directed to consider and pass orders upon the application of the petitioner wherein the petitioner seeks leave to pa

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GST – Detention of goods – mistake had crept in, in the mentioning of the lorry number as TN 19 U 7857 instead of TN 19 U 7873 – It is incumbent upon the statutory authority/the Proper Officer to have

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Goods and Services Tax – GST – By: – Ganeshan Kalyani – Dated:- 5-3-2019 – Section 44 of the Central Goods and Services Tax Act, 2017 ( CGST Act ) provides that every registered person other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. In view of the above cited provision, a registered person shall furnish annual return for the financial year 2017-18 (consisting of nine months period starting from 1st July 2017 to 31st March 2018) by 31st December 2018. However, due to unavailability of the electronic system in government portal through which the annual return is to be filed the registered person could not furnished the annual return. Therefore on the recommendation of the GST Council,

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nd furnished in the annual return. The classification may be carried out based on the name of the supplier of service. The purchase department in an organization can classify a supplier into supplier of goods and supplier of service. The list of such supplier supplying services can be used to classify the credit in to goods or services. Also, the accounting software in an organisation has a unique serial number for supplier of service's account number. The same could be useful to do the classification. Though it seems to be an easy task a considerable time will be required to carry out the task of classification of input tax credit in to inputs, capital goods and input services. Thus, one must start the activity immediately. GSTR-2A reconciliation with the input tax credit taken by the registered person in GSTR-3B: The second big task which is going to take considerable time is GSTR-2A reconciliation with the input tax credit taken by the registered person in GSTR-3B. Though the re

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18-Central Tax dated 31st December, 2018. HSN (Harmonized System of Nomenclature) summary of outward supplies and inward supplies: This is yet another time taking task. Outward supplies: Every registered person would have furnished the HSN summary of the outward supplies in Table 12 of GSTR-1. The same would be readily available to them for disclosing it in annual return. However, it is suggested to registered person to have a relook at the details before furnishing the same in the annual return. It is possible that some HSN may have skipped to be furnished in the GSTR-1 return. Hence, it is necessary to recheck the HSN summary with the outward supplies. Inward supplies: secondly, the HSN summary of inward supplies is required to be furnished in point no. 18 of the annual return. It is given in the instruction no. 17 &18 in the Notification No.74/2018 which states that in respect of inward supplies, HSN of those supplies which in value independently account for 10% or more of the t

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out of the composition scheme. Second requirement is regarding deemed supply under section 143. Section 143 of CGST Act, states that a registered person, with due intimation and conditions as prescribed, may send any inputs or capital goods to a job worker without payment of tax and from there to another job worker and so on. However, the said inputs must be received back by the principal within a period of 2 years (1 year up to 31.01.2019) and in case of capital goods within a period of 5 years (3 years up to 31.01.2019). The said time period is increased as mentioned w.e.f. 01.02.2019 vide CGST (Amendment) Act, 2018 which is made effective by Notification No. 02/2019-Central Tax dated 29th January, 2019. If the inputs and capital goods are not received back by the principal within the said time period then it would be deemed that those inputs and capital goods were supplied by the principal to the job worker and the applicable tax would become payable. In the table no. 16 of annual

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The information as regard total refund claimed, total refund sanctioned, total refund rejected, total refund pending, total demand of taxes, total tax paid as against the demand of taxes and total demand pending is required to be furnished in point 15 of the annual return. The registered person must start compiling such information so as to disclose it in the annual return. Details of ITC reversed and ineligible ITC for the financial year: The details of the Input Tax Credit reversed through Table 4(B)(i) & (ii) and ineligible Input Tax Credit furnished in Table 4(D) (1) & (2) of GSTR-3B need to be furnished in the point no. 7 of the annual return. The input tax credit so reversed could be of the GST credit or it can be transitional credit i.e. the credit claim u/s 140 of CGST Act read with rule 117 of the CST Rules, 2017. The reversal of transitional credit may have arrived at by own detection of credit being wrongly taken or on detection by the assessing officer in the cours

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he branch transfer of goods from one branch to another branch does not reduces or increases the stock in a company. Further, the asset transfer from one branch to another branch in another state also need to be consider for the purpose of arriving at the turnover because GST is applicable on the asset transfer. GST is also applicable on notice pay recovery from an employee who does not want to serve full notice period days. In this way the turnover of the annual financial statement to be arrived at in order to match it with the turnover as furnished in the annual return. If there is any difference, the explanation need to be furnished in point no. 6 of GSTR-9C. Similarly the taxable turnover to be arrived at and furnished in point no. 7 of GSTR-9C. Reconciliation of taxes paid and additional amount payable: Reconciliation of rate wise liability and amount payable thereon need to be furnished inn point no. 9 of GSTR-9C. Additional amount payable arrived at during the reconciliation of t

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2019 (3) TMI 655 – GUJARAT HIGH COURT – TMI – Grant of regular bail – issue bogus Bills under GST – setting up of firms in the name of economically backward persons – role of the employees of the co-accused – Section 439 of the Code of Criminal Procedure, 1973 – offence punishable under Sections 69(1) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 – Held that:- In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the First Information Report, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail.
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The applicant is ordered to be released on regular bail subject to conditions imposed – application allowed. – R/CRIMINAL MISC.APPLICATION NO. 1665 of 2019 Dated:- 5-3-2019 – MR. A.Y. KOGJE, J. For The Applicant (s) : MR ND NANAVATY, LEARNED SENIOR ADVOC

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espective parties do not press for a further reasoned order. 5. I have heard the learned advocates appearing on behalf of the respective parties and perused the papers. Following aspects are considered :- I) The applicant is in custody since 30.12.2018; II) Submission of learned senior advocate for the applicant that the applicant is a young person pursuing studies in Chartered Accountancy and was employed under the co-accused Hitendra Shah; III) Submission of learned advocate for the applicant that the applicant was acting under the instruction of the said Hitendra Shah and has not derived any financial gain; IV) Considering the role emerging against the applicant as narrated in the case papers, which can be recorded as under: Involvement of Applicant Mr. Prakashsinh Udavat obtained GST number in the name of Om Enterprise in March, 2018 and bogus bills amounting to ₹ 106.40 crores have been issued till July, 2018. As per the statement of Mr. Prakashsinh, only bogus bills have be

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ath Engineering (Hitendra Shah). In fact, it is found that transfer of this huge amount has been done as consideration of only billing transaction without any actual sale or purchase. Under such circumstances, it is found that Mr. Hitendra Shah and Madhav Shah are the masterminds of this entire scam. Further, Prakashsinh Udavat has stated that Hitendra Shah and Madhav Shah have trapped him in this case by alluring and made a bogus billing. Thus, as statement of the accused is admissible under section 70, there is no reason to disbelieve it. In view of the same also, Mr. Madhav Shah and Hitendra Shah are involved as master mind in this case. The businessman Prakashsinh Udavat has obtained other registration number in the name of Avi Enterprise at the same address of the business wherein also bills worth huge amount of 79.15 crores have been issued. There is a full possibility of involvement of Madhav Shah and Hitendra Shah therein also. All the facts can be exposed only at the end of co

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ra Shah and Madhav Shah are associated with each other. Thus, Hitendra Shah is involved in the entire scam. On 21/12/2018, inspection of the site was carried out by Shri S.V. Karwal, Assistant State Tax Commissioner at the residential address of the accused Hitendra Shah. During that investigation, bank statements of four other firms apart from Om and Avi Enterprise were found out from the residence of Hitendra Shah. In this regard, statement dated 26/12/2018 of Hitendra Shah under the provisions of The Gujarat Goods and Service Tax Act, 2017 and Section-70 of Central Goods and Service Tax Act, 2017 was recorded, wherein he has stated that bank statements of all these four firms were obtained by Madhav Shah for reversing the entries from S.K. Enterprise to Parshwanath Engineering. Moreover, upon asking Hitendra Shah as to whose proprietary firm this S.K. Enterprise is, he stated that management of this firm was being done by the accused Madhav Shah. Thus, the accused Madhav Shah is doi

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Shah and Madhav Shah. Both the accused persons were paying ₹ 8000/- per month to Tusharbhai and for that, they used his documents and obtained G.S.T. Number and obtained his signature in many blank cheque books. As he needed money for buying car, he got trapped in the allurement given by the aforesaid accused persons to pay the installment of the car. It is noteworthy here that, at the time of obtaining G.S.T. Number of Shivay Enterprise, the mobile number of Mr. Hitendra Shah was provided and the E-mail ID of Madhav Shah was provided. As all the process of G.S.T. was online, it is obvious that, any type of notice or messages would be sent to the said mobile number and E-mail ID. The G.S.T. Number of Shivay Enterprise was obtained by two accused persons Hitendra Shah and Madhav Shah on 07/12/2017. And in the aforesaid case, the turnover of sale of ₹ 173.58 crores was mentioned by both these accused persons in the G.S.T.R-1 Statements for the period of total ten months from

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Madhav Shah on 29/12/2018 at: 133, Isckon Green Bungalows, Ghuma village, Bopal where the accused persons were found. They were served summons u/s 70 and asked to submit their statements. Pursuant to the same, facts regarding this entire billing scam, concerned evidence and statements of concerned persons were produced before the accused Madhav Shah and his detailed interrogation was carried out and thereafter, he admitted having been involved in the said scam. Moreover, he stated about the role of other accomplices in the said scam. Further, he also stated modus operandi of the entire scam. As per the same, in order to commit the scam, Hitendra Shah, Prakashsinh Udavat and present accused namely Madhav Shah in collusion with other persons set up firms in the name of economically backward persons, obtained GST number, misused the said numbers and obtained input credit illegally for invoices of stock worth crores of rupees without actual physical transaction and caused huge loss to gov

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2011 (11) TMI 537 – SUPREME COURT. 6. In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the First Information Report, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. 7. Hence, the present application is allowed. The applicant is ordered to be released on regular bail in connection with File No. CCST/ADENF/FSU-7/MadhavArrest/2018-19/B.4 & AC/U- 6/Arrest/2018-19/B.5811 of the office of the Chief Commissioner of State Tax, Flying Squad Unit-7, Gujarat State Ahmedabad on executing a personal bond of ₹ 10,000/= (Rupees Ten Thousand Only) with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions that he shall; (a) not take undue advantage of liberty or misuse liberty; (b) not act in a manner injurious to the interest of the prosecution; (c)

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2019 (3) TMI 595 – PUNJAB AND HARYANA HIGH COURT – TMI – Carry forward of input tax credit – request of filing GST Tran-I rejected – case of petitioner is that he may be allowed to withdraw the present petition with liberty to the petitioner to file fresh one on the same cause of action by challenging Annexure P-5 – Held that:- Petition dismissed as withdrawn. – CWP-5842-2019 Dated:- 5-3-2019 – MR AJAY KUMAR MITTAL AND MRS MANJARI NEHRU KAUL, JJ. For The Petitioner : Mr. Chetan Jain, Advocate for Mr. Jagmohan Bansal, Advocate ORDER AJAY KUMAR MITTAL , J (ORAL) The petitioner has approached this Court under Articles 226/227 of the Constitution of India, inter alia, for issuance of a writ in the nature of mandamus directing the respondents

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2019 (3) TMI 513 – CESTAT CHENNAI – TMI – CENVAT Credit – input services – civil construction service done on works contract basis – period from 1.1.2016 to 31.3.2017 – Held that:- It is seen that the works undertaken are in the nature of flooring works, fencing, gate post and charges for repairing work etc. It is very much clear from the documents that the works undertaken are in the nature of repair and maintenance work. The exclusion clause in the definition of input service excludes only works contract service which is in the nature of construction of civil structure, part thereof or laying of foundation or support structure for capital goods – The works undertaken by the appellant does not fall under this category.
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vice tax credit on civil construction service doe on works contract basis for the period from 1.1.2016 to 31.3.2017. It appeared that the said service is not eligible for input service. Show cause notice dated 24.4.2017 was issued proposing to recover the CENVAT credit of ₹ 34,330/-. After due process of law, the original authority confirmed the demand and also imposed penalty of ₹ 5,000/-. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of appellant, Shri K. Pattabiraman, authorized representative appeared and argued the matter. He submitted that the works undertaken were for repair and maintenance of the factory. Periodical repair works are undertaken to upkeep the factory in good condition.

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g etc. Such works would fall within the exclusion clause as any work done for part of civil structure also would be excluded from the definition of input service. 4. Heard both sides. 5. The appellant is aggrieved by the disallowance of CENVAT credit on services which have been received by them for work done in the nature of flooring, fencing, laying of gate post etc. On perusal of the invoices placed in pages 55 and 56 of the appeal paper book, it is seen that the works undertaken are in the nature of flooring works, fencing, gate post and charges for repairing work etc. It is very much clear from the documents that the works undertaken are in the nature of repair and maintenance work. The exclusion clause in the definition of input servic

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2019 (3) TMI 371 – NATIONAL ANTI-PROFITEERING AUTHORITY – TMI – Profiteering – Melaglow Rich (Niacinamide) Depigmentation & Glow Restoration Cream – situation post implementation of GST – benefit of reduction in the rate of tax/input tax credit not passed on – increase in MRP by tampering the label – contravention of the provisions of Section 171 of the CGST Act, 2017 – penalty.
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First objection raised by Respondent No. 1 states that Section 171 of the CGST Act, 2017 was not applicable in the instant case since its scope was restricted to the cases where there was reduction in the rate of GST on the supply of the goods or services and a reduction in the rate of GST, did not extend to a reduction in the rate of tax when compared with the pre-GST indirect tax regime rates – Held that:- IT would be appropriate to mention that the main objective of introducing the GST was to subsume multiple central and state taxes to reduce the costs of doing business and while doing so there should

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he can not be allowed to pocket the amount of reduced tax which should have normally gone to the coffers of the Central/State Governments. Any benefit of reduction in the rate of tax given by the above Governments by sacrificing their own revenue must be passed on to the customers by commensurate reduction in the prices by the suppliers as per the intention of Section 171 and any other interpretation of the same would be illogical and unreasonable.
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It appears that the Respondent No. 1 is trying to misinterpret the provisions of Section 9 of the CGST/SGST Acts, 2017 and Section 5 of the IGST Act, 2017 by stating that the term “tax” as used in the above Sections does not apply on the CED, CST or the VAT as it applies only on the “supply” of goods and services – A bare perusal of Section 7 of the CGST/SGST Acts, 2017 shows that “supply” includes “sale” also and as per Section 2 (21) of the IGST Act, 2017 the supply shall have the same meaning as has been assigned to it under Section

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te) dated 28.06.2017, and the rate of GST was further reduced from 28% to 18% vide Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017. However, during these periods, the base price of the product was increased from ₹ 202.06 to ₹ 230.90 per unit which resulted in increasing of the selling price amounting to denial of not passing the benefit of tax reduction to the customers – the total amount the benefit of which was denied to the recipients by the Respondent No. 1 or the profiteered amount during the period w.e.f. 01.07.2017 to 31.07.2018, comes to ₹ 96,59,716.26/-. The Respondent No. 1 has also himself agreed to deposit this amount along with the applicable interest, vide his submission dated 24 12 2018 before this Authority.
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Since, the present investigation in to the issue of not passing on the benefit of reduction in the rate of tax by the Respondent No. 1 has been conducted w.e.f. 01.07.2017 to 31 07 2018, and the Respondent No. 1 has also not pro

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incorrect invoices which is an offence under Section 122 (1) (i) of the above Act. Hence, he is liable for imposition of penalty under the above Section read with Rule 133 (3) (d) of the CGST Rules, 2017 – opportunity must be provided to respondent No. 1 to be heard, a notice be issued to him to explain why such a penalty should not be imposed on him.
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Application disposed off. – Case No. 15/2019 Dated:- 5-3-2019 – SH. B. N. SHARMA, CHAIRMAN, SH. J. C. CHAUHAN, TECHNICAL MEMBER, MS. R. BHAGYADEVI, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER Sh. Shri R. K Gupta Applicant No. 1 in person Smt. Gayatri, Deputy Commissioner and Sh, Manoranjan, Assistant Commissioner; for the Applicant No. 2. Sh, Khomba Singh, Sh. Prakash Birla, Sh. Prabhat Ranjan and Sh Ashish Jani, Company Representatives, Sh. Sanjeev Saraf, Chartered Accountant, Sh. J. P. Singh and Smt. Shalini Ranjan, Advocates, for the Respondent No. I None for the Respondent No. 2. Sh. J. K. Arora, Chartered Accountant &am

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, which amounted to an increase of ₹ 50/- per unit post implementation of the GST. The label also disclosed that the product was marketed by the Respondent No. 1 and manufactured by the Respondent No. 2. The Applicant No. 1 had further informed vide his email dated 10.07.2018 that the above product was purchased by him from the Respondent No. 3. The Applicant No. 1 had also claimed that since the Respondents had increased the MRP of the product after the rate of tax was reduced on it, they had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act, 2017 and hence appropriate action should be taken against them. 2. The above complaint was examined by the Standing Committee and vide the minutes of its meeting dated 13.04.2018 it had requested the DGAP to initiate investigation under Rule 129 (1) of the CGST Rules, 2017 and collect evidence necessary to determine whether the benefits of reduction in the rate of tax or Input Tax Credit (ITC) had be

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ter implementation of the CST w.e.f. 01 07 2017. The Respondents were also asked to suo moto determine the quantum of profiteering, if any, on account of increase in the price of the product and indicate the same in their replies to the Notice issued by the DGAP. Further, the Respondents were also given an opportunity to inspect the non-confidential evidences/information received from the complainant on any working day between 23.07.2018 to 25.07.2018. The Respondent No. 3 visited the office of the DGAP on 25.07.2018 to inspect the same. However, the Respondents No. 1 & 2 did not inspect the record. Vide e-mail dated 15.10.2018, the complainant was requested to inspect the non-confidential evidences/replies submitted by the Respondents on 17.10.2018 or 18.10.2018 and he had inspected the non-confidential information submitted by the Respondent No. 1 on 18 10.2018. 5. The DGAP had requested for granting extension in time to complete the investigation up to 08 11 2018 which was allow

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GST (01.07. 2017 to 14.11.2017) 0% 28% 415 233.44 Post-GST (15.11.2017 onwards) 0% 18% 382 233.08 7. The DGAP has also stated that the Respondent No. 1 was also asked, vide letter dated 25 09.2018, to submit the details regarding GSTN registrations obtained, details of the invoice-wise outward taxable supplies of the above product other than zero rated from 01.07.2017 to 31.07.2018 along with the certified summary of the same, Melaglow Credit Note register for the period from July, 2017 to July, 2018, Melaglow Debit Note register for the period from July, 2017 to July, 2018, Copies of GSTR-1 and GSTR- 3B returns for the State of Delhi, for the period from July, 2017 to July, 2018, copies of two sample sale and purchase invoices of the goods under investigation for the period from July, 2017 to July, 2018. The Respondent No. 1 vide his reply dated 04.10 2018 had submitted the above mentioned details and documents to the DGAP 8. The DGAP has further stated that the Respondent NO 2 had su

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ransaction Value per Unit (Rs.) 1 SH/00009/16-17 28.04.2016 68.61 2 SH/00013/17-18 25 05.2017 94.23 3 GHP/17-18/00006 28 08.2017 64.58 4 GHP/17-18/00045 11.12.2017 64.58 9. The DGAP has also intimated that he had sent an e-mail to the Respondent No. 2 on 06 09.2018 asking him to submit the copy of the Central Excise invoices, evidencing payment of CED post 06 05 20 Id and the Respondent No. 2 vide his e-mail dated 19.09.2018 had informed that the product was being manufactured for him by from the job worker viz. M/S Helios Pharmaceuticals at its manufacturing facility located in Village Malpur, P.O. Bhud, Baddi, Teh. Nalagarh, Distt.-Solan, Himachal Pradesh- 173205 and the CED was being paid by M/s. Helios Pharmaceuticals. The Respondent No. 2 had also submitted the desired invoices and the documents to the DGAP 10. The DGAP has further intimated that vide his reply dated 27.07.2018, the Respondent No. 3 had submitted that he had purchased the product from M/S Aditya Pharmaceuticals (D

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by the Respondents No. 1 and 2 has further intimated that the following tax structure was applicable during the pre-GST and post-GST periods in respect of the above product:- S.No. Supplier Tax/Duty Rate of Taxi Duty Tax Amount Remarks 1 M/s. Helios Pharmaceutical Is (Job Worker) CED 8.13% 29.66 12 5% on 65% of MRP of ₹ 365/- 2 M/s. Sami Labs Ltd (Manufacturer) CST 2% 1.88 On the Central Excise invoice value of ₹ 94.23 3 M/s. Abbott Healthcare Pvt Ltd. 12.50% 292 On the VAT invoice value of ₹ 233 60 Total Tax Amount 60.74 Pre GST Tax rate 30.06% ₹ 60 74 as a % of ₹ 202.06 (Rs. 233 60 -Rs. 29.66 -Rs 1.88 Post-GST tax rate 28% w.e.f. 01.07.2017 12. The DGAP has also intimated that during the investigation, it had been observed that the total tax incidence on the product was 30 (Rs 60.74 tax on the base price of ₹ 202.06) in the pre-GST period, which was reduced to 28% at the time of implementation of the GST w.e.f. 01.07.2017. He has further intimated

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07.2017 after the GST had come in to force, from ₹ 202 06 to ₹ 230.90 (average base price for the sales made during the period 01 07 2017 to 31.07.2018). The DGAP has further submitted that since the Respondent No. 1 was a supplier registered under the GST, he was legally bound to pass on the benefit of reduction in the rate of GST to his customers immediately w.e.f. 01.07.2017 and 15.11.2017 however, by increasing the base price of the product and also by increasing the cum-tax price charged from the recipients post GST, the benefit of GST rate reduction was not passed on by the Respondent No. 1 to his customers. Therefore, the DGAP has concluded that in respect of the above product, supplied by the Respondent No. I during the period between 01.07.2017 to 31.07.2018, the amount of profiteering came to ₹ 96,59,716.26/- on account of increase in its base price as had been furnished in Annexure-15 by him. 15. The above Report was received on 25 10.2018 and was considere

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, the Respondent No. 1 has stated that the Respondent No. 2 had manufactured the above product and he had only procured it from him. The Respondent No. 1 has further stated that the DGAP had done incorrect comparison between the pre-GST and post-GST rates and that the comparison should have been done only between the post-GST rates. The Respondent No. 1 has also claimed that from the date of launch of the product and till 01 03.2017, he had offered ₹ 28/- as discount, which had not been counted by the DGAP The above Respondent was also asked to supply the details of the MRP change at various stages of supply chain along with the date of change of MRP for all the products supplied by him by the Authority. 19. The Respondent No. 1 has filed his first written submissions on 19.11.2018, in which he has denied the allegation of profiteering and submitted that the DGAP s Report was incorrect on facts as well as in law. He has also submitted that the product was based on a phytochemical

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eriod (Up to 06.05.2016) Exempted from Central Excise Duty, as the product was manufactured at a manufacturing facility in Baddi (availing area based exemption) 0% 12.50% 348 222.72 Pre-GST Period (From 07.05.2016 to March 2017) Attracted Central Excise Duty 12.5% on abated MRP of 8.125 effective rate 12.50% 348 222.72 Pre-GST Period (March 2017 to June 2017) Attracted Central Excise Duty 12.5% on abated MRP of 8.125% 12.50% 365 233.60 Post GST Period (from 01.07.2017 to 14.11.2017) 0% 28% 415 233.44 Post GST Period (15.11.2017 onwards) 0% 18% 382 233.08 20. The Respondent No. 1 has also submitted that Section 171 of the CGST Act, 2017 was not applicable in the instant case since its scope was restricted to the cases where there was a reduction in the rate of GST and it did not extend to the reduction in the rate of GST as compared to the pre-GST indirect tax rates. The Respondent No I has also submitted that the rates of various taxes/duties leviable during the pre-GST period and the

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he necessary precedent condition was not satisfied, since there was no reduction in rate of tax on the product When the GST was introduced w.e f. 01 07 2017 and the tax pertained to the tax imposed under the CGST Act, 2017. He has further contended that there could have been no reduction in the rate of GST, when the GST was introduced and brought into force for the first time with effect from 01.07.2017 22. The Respondent No 1 has further submitted that the aforesaid interpretation of the term rate of tax on any supply of goods or services, was unambiguous with reference to the various provisions of the GST law The terms rate of tax and tax were not specifically defined under the CGST Act or the State GST Acts and hence, the issue whether the various taxes and duties levied prior to the introduction of the GST were liable to be included within the scope of the term rate of tax had to be determined. He has also claimed that Section 9 of the CGST Act, 2017 and Section 5 of the Integrated

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to cover pre-GST taxes. He has further contended that if the intention of the legislature was to empower the Authority to investigate cases based on the rates of taxes or duties levied prior to the introduction of the GST and the rate of CST levied after introduction of the GST the provisions of Section 171 of the CGST would have been worded accordingly, in the absence of which the Authority did not have the legislative mandate to investigate and compare the GST rates with the rates of taxes or duties levied prior to the introduction of GST. He has further averred that the Section did not make any reference to the taxes levied under the indirect tax enactments in force prior to the introduction of the GST and hence the term reduction in the rate of tax on supply of goods or services had to be read in conjunction with the succeeding words on any supply of goods or services and could not be read in isolation. The Respondent No. 1 has also argued that when the expression reduction in the

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ployed in the singular form and hence the term used in Section 171 was rate of tax , and not rates of taxes and if the intention of the legislature was to empower the Authority to investigate cases based on the rates of taxes or duties levied prior to the introduction of GST and the rate of GST levied after introduction of the GST, Section 171 would have employed the plural term rates of taxes . He has further pleaded that wherever the legislature intended to refer to the provisions of the erstwhile indirect tax enactments, the term existing law had been used, however, in Section 171 there was no reference to any tax levied under the existing law . 25. The Respondent No. 1 has also submitted that the legal maxim contemporanea exposito, which was used by the courts to interpret any ambiguous law was applicable in this case also. The Respondent No. 1 has also argued that the Authority on its website had published its mandate and had also defined profiteering in reply to the FAQs however,

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services was passed on by a commensurate reduction in the price. As these rates had been reduced on a number of products it was imperative that the benefit of reduction in the rates was passed on to the consumers and was not pocketed by the suppliers which would amount to unjust enrichment. The Respondent No. 1 has further claimed that he had dutifully reduced the price of the product post reduction in the rate of GST with effect from 15.11.2017 which was clear from the table given below:- Period Rate MRP (Rs.) 01.07.2017 14.11.2017 28% 415 15.11.2017 onwards 18% 382 27. The Respondent No. 1 has also submitted that even if it was assumed that the scope of Section 171 extended to the reduction in the rate of CST as compared to the pre-CST indirect tax rates, it was not applicable in his case since there was no reduction in rate of tax with effect from 01.07.2017, rather, there was an increase in the rate of tax w.e.f. 01 07.2017. He has further submitted that In the table given in Para

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of GST applicable on the product w.e.f. 01.07.2017 was 28%, there was no reduction in the rate of tax as was clear from the following table:- Particulars Effective rate computation as per the DGAP Report Correct method of effective rate computation Central Excise Duty 29.66 29.66 CST 1.88 1.88 VAT (upto the stage of Abbott's sale price) 29.2 29.2 VAT (in the distribution chain beyond sale by Abbott i.e. in subsequent sales) 0 11.36 (A) Numerator – Total Tax 60.74 72.10 (B1) Denominator – Abbott's sales price minus taxes 233.60 – 60.74= 202.06 (B2) Denominator – MRP of the product (i.e. ₹ 365/-) minus all applicable taxes 365 – 72.10 = 292.90 Effective tax rate A/B1 = 60.74/202.06 = 30.06% A/B2 = 72.10/292.90 – 24.62% 29. The Respondent No. 1 has further submitted that the computation had been done without thorough understanding of the pricing structure of the product and the tax computation method under the prevailing indirect tax laws. He has also contended that by fol

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0 June 2017 (pre-GST) and ₹ 233 44 during the period from 1 July 2017 (post-GST) 31. The Respondent No. 1 has also claimed that the increase in the MRP was due to increase in the indirect tax rates on account of introduction of GST and due to revision of pricing structure due to withdrawal of the discount which was earlier taken in to account while fixing the MRP Which could not be brought under the purview of Section 171. He has further claimed that the DGAP had ignored that the cause for increase in the MRP was not due to increase in the base price or profiteering but was on account of following factors:- a. Up to 06 05.2016, i.e. up to the period when CED exemption was applicable, CED was not factored in the selling price since the said duty was exempted b. With effect from 07.05.2016, when the above exemption was withdrawn the applicable CED rate was 12.5% on 65% of MRP i.e. @8.125%, however, he had not increased his MRP. He has also stated that the product continued to be su

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gm 395 435 401 Kojivit Ultra 20 gm 326 357 367 Advan 10 435 470 430 Advan 20 560 590 560 33. In his submissions dated 24.12.2018, the Respondent No. 1 has stated that post CED exemption, he had not passed on the cost of excise to the consumer by way of price increase and charging of the same at the time of the implementation of the GST it had been viewed by the DGAP as increase in the base price although he was entitled to charge the cost of excise duty post May 7, 2016. 34. In his submissions dated 24.12.2018 the Respondent has claimed that after the expiry of the CED exemption w.e.f. 07 05.2016 and upto 30.06.2017, after which the GST had come in to force he had not increased the price of the above product and had increased it w.e.f. 01 07.2017, although he had right to increase the same, however, it had been construed as profiteering made by him which was not his intention. He has therefore, stated that he had taken an internal decision to suo moto deposit the alleged amount of prof

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of GST w.e.f. 01.07.2017. He has also intimated that other issues raised by the Respondent had already been covered in the Investigation Report itself. 36. We have carefully considered the material placed before us and all the submissions made by the Respondent No. 1, dated 19.11 2018 and 24.12.2018, and email received by the Authority from the Respondent No. 2, dated 12.12.2018. In the instant case, the Respondent No. 1 has raised mainly three objections. The first objection raised by him states that Section 171 of the CGST Act, 2017 was not applicable in the instant case since its scope was restricted to the cases where there was reduction in the rate of GST on the supply of the goods or services and a reduction in the rate of GST, did not extend to a reduction in the rate of tax when compared with the pre-GST indirect tax regime rates. In this regard, it would be appropriate to mention that the main objective of introducing the GST was to subsume multiple central and state taxes to

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CGST Act, 2017 and Section 173 of the State GST Acts, 2017 that the Central and the State Acts which imposed CED, CST as well as the VAT have been repealed (Except for Entry 84 of the Union List and Entry 54 of the State List) and the above duty/taxes have been subsumed in the GST and the new rates of GST have been fixed near to the net incidence of the above three taxes which was in force before coming in to effect of the GST, as per the recommendation of the GST Council. Therefore, in case the net effect of the above taxes was more than the rate of CST fixed on 01.07.2017 the same would have to construed as reduction in the rate of tax as per the provisions of Section 171 (1) as the above provision had come in to effect immediately w.e.f. 01.07.2017 and the consequent benefit in the shape of commensurate reduction in the price has to be passed on otherwise it would result in earning undue profit by the supplier on account of tax which they can not appropriate. Had this not been the i

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coffers of the Central/State Governments. Any benefit of reduction in the rate of tax given by the above Governments by sacrificing their own revenue must be passed on to the customers by commensurate reduction in the prices by the suppliers as per the intention of Section 171 and any other interpretation of the same would be illogical and unreasonable. 37. It appears that the Respondent No. 1 is trying to misinterpret the provisions of Section 9 of the CGST/SGST Acts, 2017 and Section 5 of the IGST Act, 2017 by stating that the term tax as used in the above Sections does not apply on the CED, CST or the VAT as it applies only on the supply of goods and services. A bare perusal of Section 7 of the CGST/SGST Acts, 2017 shows that supply includes sale also and as per Section 2 (21) of the IGST Act, 2017 the supply shall have the same meaning as has been assigned to it under Section 7 of the CGST Act, 201 T As CED forms part of the price of the product on which VAT is leviable therefore,

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rate of tax prohibit such comparison, to examine whether the above two benefits have been passed on or not. There is no doubt that the expression reduction in the rate of tax has to be read in conjunction with the words on any supply of goods and services but it can not be interpreted to mean that only reduction in the rate of GST can be considered for invocation of Section 171 (1) and no comparison can be made with the pre-GST rates. 39. The Respondent No. 1 has submitted three case laws i.e. Aswini Kumar Ghose v. Arabinda Bose AIR 1952 SC 369 = 1952 (10) TMI 32 – SUPREME COURT, Rao Shiv Bahadur Singh v. State of U. P. AIR 1953 SC 394 = 1953 (5) TMI 12 – SUPREME COURT and J. K. Cotton Spinning & Weaving Mills co. Ltd. v. State of U. P. AIR 1961 SC 1170 = 1960 (12) TMI 77 – SUPREME COURT, in his support which pertain to the interpretation of the statutes. It is to emphasize that the legal principles for interpreting a statute are to be used only when parent legislation is ambiguou

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es to interpretation. The FAQs/lnformation on the Authority s website are merely guiding in nature and have no binding force of a statutory law and hence the above maxim can not be invoked by the Respondent in his support. 41. Also, the legal maxim of contemporanea exposito is applicable in construing ancient statutes, but not for interpreting acts which are comparatively modern. In the legal jurisprudence, the maxim of contemporanea exposito was invented to interpret the provisions of statues made centuries earlier. In English courts, the legal maxim has been used to interpret the laws made in the Victorian times but according to the latest contemporary legal usages assigned o those provisions it has been rarely used. In this respect, the landmark case of J. K. Cotton Spinning and Weaving Mills Ltd. and another v Union of India and Others, AIR 1988 SC 191 = 1987 (10) TMI 51 – SUPREME COURT OF INDIA, is worth mentioning. In this case, the learned counsel had relied on the judgement pas

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than 2 years ago, they cannot be termed as old statutes. Moreover, the provisions of Section 171 are not at all ambiguous and are rather very clear in their scope and intent. Therefore, the Respondent No. I s argument of invoking the legal maxim of contemporanea exposito, to arrive at the contemporary exposition of the statute is not tenable and hence no reliance is being placed on the cases cited by him. 42. The Respondent No. 1 in his submission dated 19.11 2018 has contended that there was no reduction in the rate of tax and the DGAP had erred while calculating the effective rate of tax in the pre-GST regime. The Respondent No. 1, in para 41 of his submissions has given a table and argued that the DGAP had not included the VAT charged on the sale of the product in question beyond the sale made by him meaning that the VAT charged in the subsequent sales made after the Respondent No. 1 had sold the product should also have been included while computing the pre-GST rate. He has furthe

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ully relied upon. 43. The Respondent No. 1, in his submission dated 19.11.2018, has said that he had not increased the base price and the DGAP s calculation was factually incorrect as it was based on the wrong assumption that there was reduction in the rate of tax post-GST. He has also claimed that the increase in the MRP by 4.89% was made in March, 2017 due to increase in the rate of GST and the withdrawal of the discount which he was giving due to cessation of the CE exemption. But the Respondent No. I s submissions fall Short Of establishing this fact as it is apparent from the record that he had increased the base price of the product-from ₹ 202 06 (Rs. 233.60 ₹ 29.66 CED-Rs. 1.88 CST) to ₹ 230.90 per unit w.e.f. 01.07 2017 whereas he should not have increased it and supplied the product by charging 28% GST w.e.f. 01.07.2017 and 18% w.e.f. 15.11.2017 to pass on the benefit of tax reduction. There is also no evidence to suggest that the above Respondent had increas

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tors to prove that his MRP was the lowest however, the claim made by him cannot be confirmed due to lack of supporting evidence and hence the same cannot be relied upon. 45. The Respondent No. 1 in his submission made to this Authority on 24.12.2018 has specifically admitted that he had resorted to profiteering and agreed to deposit the entire amount of ₹ 96,59,716.26/- along with applicable interest therefore, there is no doubt that he has contravened the provisions of Section 171 (1) of the above Act and is hence, liable for its consequences. 46. It is also revealed from the perusal of the record that the Respondents No. 2 and 3 did not have any role regarding the increase in the base price as well as the MRP of the product as it was solely done by the Respondent No. 1, thus, only he is primarily responsible for the benefit of reduction in the tax rate not having been passed on to the recipients. 47. From the above discussion, it is revealed that the rate of tax was 30.06% in t

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e Respondent No. 1 has also himself agreed to deposit this amount along with the applicable interest, vide his submission dated 24 12 2018 before this Authority. 48. Accordingly, the Respondent No. 1 is directed to reduce the price of above mentioned product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, by making commensurate reduction in its price, keeping in view the reduction in the rate of tax w.e.f 01.07.2017 and 15.11 2017 so that the benefit is passed on to the recipients Since the Applicant No. 1 has not produced the invoice vide which he had purchased the above product the amount to be refunded to him can not be determined. However, the Authority places on record its appreciation of the efforts made by him in bringing to notice this case of profiteering and for being present in person through the proceedings. The Respondent No. 1 is also directed to deposit the profiteered amount of ₹ 96,59,716.26 (Rupees Ninety Six Lakh Fifty Nine Thousand Seven Hun

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te CWFs as shown in the table given below:- S. No. State/Union Territory Total Qty. supplied (in nos.) Total profiteering (in Rs.) 1 Andhra Pradesh 12,214 2,05,471.4 2 Assam 2,440 42, 42,419.97 3 Bihar 986 16,204.15 4 Chandigarh 1,284 23,408.61 5 Chhattisgarh 2,394 41,846.34 6 Delhi 17,991 3,20,481 7 Goa 1,066 18,659.2 8 Gujarat 13,728 2,42,152.1 9 Haryana 6,288 1,14,459.3 10 Himachal Pradesh 276 4,316.185 11 Jammu & Kashmir 5,857 92,990.59 12 Jharkhand 2,730 48,884.19 13 Karnataka 27,796 4,84,989.6 14 Kerala 16,965 2,46,898.4 15 Madhya Pradesh 6,309 1,16,987.1 16 Maharashtra 53,592 9,41,457.6 17 Manipur 609 11,283.15 18 Meghalaya 228 3,776.91 19 Odisha 7,354 1,28,968.5 20 Pondicherry 264 4,111.775 21 Punjab 8,534 1,53,999.4 22 Rajasthan 7,045 1,22,741.8 23 Tamil Nadu 15,001 2,62,438.2 24 Telangana 16,636 3,07,438.4 25 Tripura 315 5,586.68 26 Uttar Pradesh 20,681 3,45,324.3 27 Uttarakhand 3,117 57,059.39 28 West Bengal 25,173 4,65,503.9 Total amount to be deposited in State Consume

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ty during the hearing on 15.11.2018, the DGAP is directed to further investigate the quantum of profiteering on all the products including the present product which the Respondent No. 1 is supplying and thereafter submit his report accordingly. 51. It is also established from the above facts that the above Respondent has issued incorrect invoices while selling the above product to his customers as he had not correctly shown the basic price which he should have legally charged from them. The Respondent has also compelled them to pay additional GST on the increased price through the incorrect tax invoices which would have otherwise resulted in further benefit to the customers which he has failed to pass on. It is also established from the record that the Respondent has deliberately and consciously acted in contravention of the provisions of the CGST Act, 2017 by issuing incorrect invoices which is an offence under Section 122 (1) (i) of the above Act. Hence, he is liable for imposition o

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2019 (3) TMI 345 – CESTAT CHENNAI – TMI – CENVAT Credit – input services – insurance services – period from April 2016 to June 2017 – denial on account of nexus – Held that:- The first policy is in the nature of errors and omission insurance policy. It is a form of insurance policy which covers the risk on failure to perform on the part of financial loss caused or shortage in the service provided or the products sold – the disallowance of credit on errors and omission insurance policies is unjustified and requires to be set aside.
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The second type of insurance policy is the transit insurance policy. The appellant has explained that such insurance policy is taken to cover the risk of accident or damage of the goods such as computers, routers etc. which are transported to the premises of the customer – the appellant herein is not a manufacturer but an output service provider and the definition of input service would not be applicable to output service provider. Any input service us

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ndent ORDER Brief facts are that the appellants are engaged in providing various taxable services in the nature of telecommunication service, franchise service, business auxiliary service etc. They were earlier functioning under Large Taxpayer Unit having centralized registration. On verification of records, it was noticed that they had availed input service credit on insurance services during the period from April 2016 to June 2017. According to department, general insurance / insurance auxiliary service are not covered under the definition of input service used for providing output service as they had no nexus with the provision of output service and therefore became ineligible for input service credit. Show cause notices were issued proposing to demand an amount of ₹ 1,74,869/- along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and also imposed penalty. In appeal, Commissioner (Appeals) upheld th

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portation. The appellant is to transport the finished goods as well as input such as routers, computers etc. It is highly necessary to cover the risk of any accident or damage during the transit of these goods. 2.2 The third insurance policy is umbrella fixed asset policy. This insurance policy intends to cover the asset / property and to provide insurance against loss of the risk due to fire, theft and weather damages. These insurance policies are not in regard to the benefit of employees and are not covered under the exclusion definition of input services. It is also submitted by him that for the earlier period, in the appellant s own case, the Commissioner (Appeals) vide Order-in-Appeal No. 534/2017 dated 29.12.2017 had allowed the credit in respect of transit insurance as well as umbrella fixed asset policy. He also relied on the decision of the Tribunal rendered in their own case reported in 2018 (10) TMI 563 – CESTAT Chennai wherein the Tribunal has allowed the credit in respect

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s unjustified and requires to be set aside, which I hereby do. 5.1 The second type of insurance policy is the transit insurance policy. The appellant has explained that such insurance policy is taken to cover the risk of accident or damage of the goods such as computers, routers etc. which are transported to the premises of the customer. The ld. AR has argued that place of removal being the appellant s premises, the said credit is not eligible. However, the appellant herein is not a manufacturer but an output service provider and the definition of input service would not be applicable to output service provider. Any input service used for providing output service is eligible for credit in the case of an output service provider. Hence disallowance of credit on this policy is unjustified and requires to be set aside, which I hereby do. 5.2 The third type of insurance policy is umbrella fixed asset policy. The appellant has taken this insurance policy to cover the risk such as fire, theft

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