Goods and Services Tax

Goods and Services Tax – GST Dated:- 13-11-2024 – News – 1. Invoice Management System (IMS) has been made available on the GST Portal from 14th October, 2024 wherein the recipient taxpayer can accept, reject or keep the invoices pending which are saved/filed by their suppliers in their respective GSTR-1/ 1A/IFF . This is to further inform you that the first GSTR-2B on the basis of such actions taken in IMS by the recipient taxpayers will be generated on 14th November, 2024 for October-2024 period. 2. To further facilitate the taxpayers, the Supplier View of IMS has also been made available where the action taken by their recipients on the records/invoices reported in GSTR-1/ 1A/IFF , will be visible to the suppliers in Supplier View func

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Case-Laws – GST – Highlights – The summary focuses on the challenge to proceedings initiated u/s 129 of the CGST Act read with Section 20 of the IGST Act, involving a penalty order for the movement of goods without proper documents. The key points are: The goods were accompanied by dated documents, but the petitioner's registration was suspended by the jurisdictional authorities after the documents were issued. A coordinate Bench of the High Court, in the Halder Enterprises case, held that if goods are found with proper tax invoices and e-way bills, the circular dated 31.12.2018 would apply, deeming the petitioner as the owner, and the goods should be released u/s 129(1)(a) of the CGST Act. In the present case, the respondents did not dispute the presence of proper tax invoices and e-way bills, and the action was solely based on the suspension of registration. The High Court, relying on its previous decisions, set aside the impugned order and allowed the petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The petitioners challenged the show cause notices (SCNs) issued by the respondent under the CGST Act, IGST Act, and MGST Act, contending that the services rendered by the Municipal Corporation of Greater Mumbai (MCGM) are exempted or subject to a nil tax rate under the relevant exemption notifications. The key issues are: 1) The jurisdiction of the SCNs, as the petitioners claim the services are exempt or nil-rated. 2) The factual element regarding each demand must be examined against the backdrop of the exemption or nil rate notifications. 3) The adjudicating authority must determine whether the taxed activities relate to functions entrusted to MCGM under Article 243W of the Constitution. The High Court held that the petitions cannot bypass the statutory alternate remedies, as the issue of exemption applicability is debatable and requires factual examination. Splitting or quashing the SCNs is not permissible where arguable issues exist on both sides. The contention of the SCNs being wholly without jurisdiction cannot be accepted, and the petitions were dismissed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – In a case concerning the dismissal of an application to summon an official from the GST Department in Ludhiana along with the GST 3B return record, the High Court held that the petitioners do not have the right to summon witnesses at the stage when the respondent-complainant is producing evidence. The petitioners have the right to cross-examine the respondent-complainant and witnesses, and confront them with documents, but they are not entitled to summon witnesses during this stage. The petitioners sought to produce the GST 3B return document, which they can present to the respondent-complainant or witnesses without summoning an official. The trial Magistrate's well-reasoned order dismissing the petitioners' application was upheld by the High Court, finding no merit in the petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Section 17(5)(c) and (d) of the Central Goods and Services Tax Act, 2017, which restricts input tax credit on GST paid for purchase of land and construction thereon, has been upheld by the Supreme Court. The petitioner sought to claim input tax credit on GST paid for land purchase and construction. However, the issue is no longer res integra and is covered by the Supreme Court's decision in Chief Commissioner of Central Goods and Service Tax & Ors. Versus M/s Safari Retreats Private Ltd. & Ors., where the constitutional validity of these provisions was upheld. The petitions are disposed of, allowing the petitioners to file claims for availing input tax credit, which shall be considered in accordance with law. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Interpretation of Sections 415 and 420 of the Indian Penal Code (IPC) and Section 66D of the Information Technology Act, 2000, in the context of online betting. The court held that for an offence u/s 415 (cheating) to be punishable u/s 420, there must be a person who has been deceived from the inception with a dishonest intention to commit fraud. The court found no evidence of any person being deceived or hoodwinked in the present case. Relying on Supreme Court precedents, the court concluded that the necessary ingredients for offences u/ss 415 and 420 IPC were not met. The state's investigation spanning over three years failed to identify any victims or evidence against the petitioners. Allowing further proceedings would amount to an abuse of the legal process. Invoking Section 482 of the Criminal Procedure Code, the High Court quashed the FIR to prevent a miscarriage of justice. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The court quashed the order blocking the Electronic Credit Ledger (ECL) of the petitioner u/r 86A of the Central Goods and Services Tax Rules, 2017. The respondents did not provide a pre-decisional hearing to the petitioner, nor did the impugned order contain cogent reasons to believe that blocking the ECL was necessary, violating principles of natural justice. The court relied on the K-9-Enterprises case, where it was held that the mandatory requirements of Rule 86A were not fulfilled, and the respondents could not rely on the satisfaction of another officer. The impugned order merely stated that the supplier was found non-existent or not conducting business, without providing independent or cogent reasons. Consequently, the impugned orders were quashed for lack of valid reasons and violation of principles of natural justice. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The court held that the issue in controversy regarding the legality of sub-section (4) to Section 16 of the Central Goods and Service Tax Act, 2017 and the Karnataka Goods and Service Tax Act, 2017, concerning the date of availment of input tax credit (ITC) in the books of account of the petitioner, is directly and squarely covered by its previous judgment in M/s. Sadhana Enviro Engineering Services vs. Joint Commissioner of Central Tax & Others. In that case, the court directed the respondents to unblock and release the credit balance of the petitioner in their ITC Ledger/Account immediately and without delay. Consequently, the present petition deserves to be allowed and disposed of accordingly. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Goods and Services Tax – GST Dated:- 12-11-2024 – News – Advisory regarding IMS during initial phase of its implementation Dated:- 12-11-2024 – Invoice Management System (IMS) is an optional facility introduced from October 2024 on GST Portal, on which the invoices/records saved/furnished by the supplier in GSTR-1 / 1A/IFF, can be accepted, rejected or kept pending by recipients .Based on the action taken by the recipient on the IMS, system will generate the GSTR 2B of the recipient on 14th of subsequent month. The Taxpayer can accept/reject/keep pending the invoice/record on IMS after due verification from his accounts. The ITC for the rejected record will not be available to the recipient in the GSTR 2B . Further, the liability and inp

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n incorrect details of available/eligible input tax credit to the recipient being shown in his GSTR-2B , which will also be auto-populated in his GSTR 3B on the portal. In such cases, the recipient can change the action on the IMS in respect of an invoice/record ( e.g. from rejected to accepted or vice versa) and can recompute his GSTR-2B at any time till the filing of GSTR 3B for the corresponding tax period, so that correct ITC is auto-populated in his GSTR 3B . Despite this, there may still be some cases, where the recipient is not able to correct the action taken on the IMS, resulting in wrong auto-population of ITC in GSTR 3B of the recipient or wrong auto-population of liability in GSTR 3B of the corresponding supplier. Therefore, dur

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Case-Laws – GST – Highlights – The High Court held that the impugned Press Release by the Ministry of Finance, purporting to direct judicial and quasi-judicial authorities to classify all alcohol-based hand sanitizers as “disinfectants” attracting 18% GST rate, is invalid. The Court ruled that the executive cannot transgress on the functions within the exclusive province of judicial or quasi-judicial authorities. The issue of product classification falls within the domain of judicial and quasi-judicial bodies created under the Act, who must exercise their powers independently without executive interference. The Press Release virtually expressed a firm view on classifying hand sanitizers as “disinfectants” rather than “medicaments,” urging authorities to levy 18% tax, thereby influencing their independent decision-making. Consequently, the Court set aside the Press Release to enable unbiased adjudication by judicial and quasi-judicial authorities on product classification and applicable tax rates. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Interim order directing release of goods upon depositing Rs. 4 lakhs challenged. Considering the order, determined liability of Rs. 22,35,932/- on respondent No. 1, and total goods value of Rs. 12,83,354/-, appeal disposed by upholding the order. Additionally, respondent No. 1 directed to furnish a Bank Guarantee from a Nationalized Bank for Rs. 8,83,354/- in favor of the Joint Commissioner of Commercial Taxes (Vigilance), valid during the pendency of the writ petition. Respondent No. 1 also required to furnish a personal bond of Mr. Chikka Aanjibabu, Proprietor, within two days to enable appellants to release goods and conveyance as per the Single Judge's direction, subject to the writ petition's outcome. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court set aside the assessment order disallowing Input Tax Credit solely on the ground of delayed filing of claims beyond the prescribed period u/s 16(4) of the GST Acts. The Court directed the assessing adjudicating authority to re-do the assessment considering the amendment. The petitioner was granted three weeks to submit objections after receiving the amended assessment and other details. The impugned order remains undisturbed on other issues. The petition was disposed of. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Cancellation of GST registration – violation of Section 29(2)(a) of Central Goods and Services Tax Act, 2017. Respondent no. 2 is the proper authority to inquire about cancellation or suspension of GST registration and pass necessary orders. Although a notice might have been issued under an erroneous provision, petitioner no. 1 has liberty to reply, raise jurisdictional issues, and request amendments. Respondent no. 2 can initiate appropriate proceedings if petitioner no. 1 shows the provision invoked is incorrect. Only a show cause notice has been issued seeking clarification and documents from petitioner no. 1. Authorities must hear the party and pass orders per law. Premature for the High Court to interfere at this stage. Petition disposed of. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Consolidated show cause notices for multiple assessment years contravene provisions of CGST Act and legal precedents. Impugned notices grouping demand from 2017 to 2023 quashed, with liberty to issue separate notices for each assessment year u/s 73 of CGST Act. Petition allowed, quashing impugned notices and further proceedings. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – States – Highlights – The circular clarifies the regularization of refund of IGST availed in contravention of Rule 96(10) of CGST Rules, 2017, where exporters had imported inputs without paying integrated taxes and compensation cess. Initially, if inputs were imported without IGST and cess by availing exemption notifications, but later the exporter paid IGST, cess with interest and got the Bill of Entry reassessed, then the IGST paid on exports shall not be considered in contravention of Rule 96(10). The Explanation inserted in Rule 96(10) retrospectively deems the exemption notification benefits as not availed if IGST and cess were paid on imported inputs. Thus, refund of IGST paid on exports can be regularized in such cases. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Bail granted to accused in case involving alleged issuance of fake invoices by nine firms for evasion of GST through fraudulent claims of input tax credit. Complaint alleges non-traceable addresses and proprietors of firms used to generate fake invoices. Maximum punishment of five years, accused already in custody for over seven months. Offences compoundable and triable by Magistrate, trial likely prolonged. Accused released on bail of Rs. 1,00,000 personal bond and two sureties of Rs. 50,000 each, subject to appearing before court on all dates. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Violation of principles of natural justice by the authority in passing a non-speaking order without applying its mind to the material on record. It emphasizes that reasoning is the essence of any quasi-judicial order with adverse consequences. The impugned order merely stated that the reply and documents were unacceptable, without addressing the objections raised by the petitioner. Consequently, the High Court held that the order suffered from being non-speaking, violating natural justice principles, and set it aside, allowing the petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The Court held that the impugned order invoking Rule 86A of the CGST/SGST Rules by blocking the petitioner's Input Tax Credit (ITC) without providing a pre-decisional hearing violated principles of natural justice. The order lacked independent or cogent reasons, merely relying on reports of the Enforcement authority, which is impermissible as it amounts to borrowed satisfaction. The impugned order stating the petitioner was found non-existent or not conducting business without providing further reasons was also found deficient. Consequently, the High Court quashed the impugned order dated 09.07.2024 and directed the respondents to unblock the petitioner's ITC immediately to enable filing of returns, allowing the petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The case pertains to the refund of tax paid by the petitioner under the 'Inverted Duty Structure' in the Goods and Services Tax (GST) regime. The petitioner filed an application for refund on 12.04.2023, beyond the limitation period, claiming a refund of Integrated Goods and Services Tax (IGST) paid. The High Court held that when the amounts in the credit ledger were set off against the demand, their character changed to that of tax recovered by the department. An appeal against the demand raised by the Assessing Officer was allowed on 20.02.2022, and the order was communicated on 15.08.2022. The second Explanation to Section 54 of the GST Act states that when tax becomes refundable due to an order of the Appellate Authority, the relevant date is the date of communication of such order, which in this case was 15.08.2022. The petitioner's online application could not be uploaded due to a technical glitch, and the Government contended that the 'Inverted Duty Structure' refund is possible only for two years. The High Court allowed the petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The petitioner is deprived of the statutory remedy of appeal against the impugned order due to the non-constitution of the Tribunal u/s 112(8) and (9) of the B.G.S.T. Act. Consequently, the petitioner cannot avail the benefit of stay on recovery of the balance tax amount upon deposit as contemplated u/s 112(8) and (9). The State authorities acknowledged the non-constitution of the Tribunal and issued a notification u/s 172, providing that the limitation period for filing an appeal before the Tribunal u/s 112 shall commence after the President's appointment. The petition is disposed of subject to depositing 20% of the remaining disputed tax amount, in addition to the earlier deposit u/s 107(6), entitling the petitioner to the statutory stay benefit u/s 112(9), as the non-constitution of the Tribunal cannot deprive the petitioner of this right. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Non-constitution of Appellate Tribunal under CGST/OGST Act deprived petitioner of statutory remedy of appeal against order passed by Authority. Considering Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 and clarification by Central Board of Indirect Taxes and Customs vide Circular No.132/2/2020, High Court deemed it proper in the interest of justice to dispose of the writ petition. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – States – Highlights – Goa government circular clarifying place of supply for data hosting services provided by Indian service providers to overseas cloud computing service providers. Key points: Data hosting service providers not considered intermediaries under IGST Act; services not related to goods made available by recipient or immovable property. Place of supply determined by default provision u/s 13(2) IGST Act as location of recipient. Services provided to overseas cloud computing entities qualify as export of services subject to conditions u/s 2(6) IGST Act. Circular issued for uniform implementation of the clarification. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – States – Highlights – The circular clarifies the availability of input tax credit on demo vehicles used by authorized dealers for providing trial runs and demonstrating features to potential buyers. It covers two key issues: availability of ITC on demo vehicles u/s 17(5)(a) of the CGST Act, and availability of ITC where demo vehicles are capitalized by dealers. The circular states that demo vehicles promote sale of similar vehicles and are thus used for 'further supply', qualifying for ITC u/s 17(5)(a)(A). However, ITC is not available if vehicles are used for staff transportation. For dealers acting as agents, providing test drives on behalf of manufacturers, ITC is not available as they are not making further supply. The circular also clarifies that capitalization of demo vehicles does not impact ITC availability, subject to conditions like depreciation claims under Income Tax Act. Dealers must pay applicable tax when subsequently selling capitalized demo vehicles. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – States – Highlights – This circular clarifies the position regarding advertising services provided by Indian advertising companies/agencies to foreign clients. It addresses three key issues: whether the advertising company can be considered an intermediary, whether the foreign client's representative in India or target audience can be considered the recipient, and whether such services qualify as performance-based services under IGST Act. The circular clarifies that the advertising company is not an intermediary but provides services on a principal-to-principal basis. The foreign client, not its Indian representative or target audience, is the recipient. Such advertising services do not qualify as performance-based services u/s 13(3) of IGST Act. Consequently, the place of supply is determined u/s 13(2) as the location of the recipient, i.e., outside India, making it an export of services. However, if the advertising company merely facilitates the provision of media space between the foreign client and media owner, acting as an intermediary, the place of supply is determined u/s 13(8)(b) as the location of the intermediary. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – This corrigendum clarifies that the restriction on refund u/s 150 of the Finance (No. 2) Act, 2024 will not apply to refunds of pre-deposit amounts paid by taxpayers at the time of filing appeals under sub-sections (6) of Section 107 or (8) of Section 112 of the CGST Act, where such appeals are decided in favor of the taxpayer. It inserts this clarification at the end of paragraph 4 of Circular No. 237/31/2024-GST dated 15th October 2024, issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, Ministry of Finance, Government of India. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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