Goods and Services Tax

Circulars – GST – Highlights – Circular clarifies GST rates and classification of goods based on GST Council recommendations in its 53rd meeting. Solar cookers working on dual energy attract 12% GST. Fire water sprinklers attract 12% GST. Parts of poultry-keeping machinery attract 12% GST. Agricultural farm produce in packages over 25kg/25L excluded from pre-packaged and labelled definition, hence exempt from 5% GST. Supplies of pulses/cereals to/by government agencies for distribution to weaker sections regularized for past period subject to conditions. Issues regularized on as is where is basis for prevailing genuine doubts. – 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 – Clarifications issued regarding applicability of GST on certain services including exemption for Ministry of Railways (Indian Railways) supplies to public and inter-zone/division supplies; exemption for transactions between Special Purpose Vehicles (SPVs) and Ministry of Railways; statutory collections by Real Estate Regulatory Authority (RERA) covered under GST exemption; incentive amount shared by acquiring banks with stakeholders under RuPay/UPI promotion scheme treated as subsidy and not taxable; reinsurance of specified general/life insurance schemes regularized for 01.07.2017 to 24.01.2018; reinsurance of government-sponsored insurance schemes regularized for 01.07.2017 to 26.07.2018; retrocession services included in 'reinsurance'; accommodation services with value up to Rs. 20,000 per person per month for minimum 90 days exempted from 15.07.2024 and regularized for 01.07.2017 to 14.07.2024. – 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 Rule 86A empowers the Commissioner or authorized officer to restrict debit of fraudulently availed or ineligible Input Tax Credit (ITC) from the electronic credit ledger for discharge of liabilities or refund claims, subject to recording reasons in writing. Sub-rule (3) mandates that such restriction shall cease after one year from imposition. As the restriction was imposed on 23rd November 2022 and one year lapsed around 23rd November 2023, the restriction has ceased by operation of law. The petition was 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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Case-Laws – GST – Highlights – Impugned award unaffected by fraud or corruption; Arbitral Tribunal considered materials and submissions; no case made out regarding fraud in passing award. Parties contemplated GST implementation in Share Purchase Agreement; incentives payable only to extent tax accrued to State Government. Withdrawal of exemption notification pursuant to statutory mandate under CGST Act; legislature incorporated proviso allowing rescission of tax exemption incentives. Claim of estoppel rejected. Petitioners failed to make out prima facie case for unconditional stay; directed to secure awarded amount – 50% by transfer, 50% by bank guarantee within six weeks. – 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 petitioner's registration due to alleged fraud, willful misstatement, or suppression of facts in obtaining registration. Proper Officer issued show cause notice, but petitioner claimed non-disclosure of basis. Proper Officer clarified and provided documents. Petitioner filed response, but Proper Officer canceled registration on premise of non-reply. Matter remanded to Proper Officer for reconsideration of petitioner's case, taking note of response and affording opportunity of hearing. Petition disposed by way of remand. – 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 – Applicant eligible to avail Input Tax Credit (ITC) on capital goods like wires/cables, electrical equipment used for transmission of electricity from power station to factory premises, installed outside factory as per rules/policy. Conditions u/s 16 fulfilled. Not hit by Section 17(5)(c) and (d) as goods not fixed to earth, can be removed for maintenance. Transfer of service line to GETCO at zero value under agreement does not bar ITC availment, but applicant liable u/s 18(6) in such situations. Applicant eligible for ITC on specified capital goods used for electricity transmission from DISCOM to factory premises. – 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 – Deduction of nominal amount from employees' salaries for availing food facility in factory premises is not considered 'supply' u/s 7 of CGST Act, as per Circular No. 172/04/2022-GST. Input Tax Credit is available to applicant for GST charged by Canteen Service Provider, restricted to cost borne by applicant, as canteen facility is obligatory under Factories Act and Gujarat Factories Rules for employees in factory. – 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 turnkey contract entered by the applicant with PGVCL is a works contract as defined u/s 2(119), involving a composite supply for installation, testing, and commissioning of 11 KV medium voltage covered conductor (MVCC) with accessories. The contract is not divisible, despite constituting two interconnected and interdependent parts. GST is payable on the advance received by the applicant for the turnkey contract, as per Section 12(2)(a) of the CGST Act, 2017. The benefit of Notification No. 66/2017-CT is not applicable to this turnkey contract, which is treated as a supply of service under Schedule II. – 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 transportation of coal (minerals) within a mining area, such as from the mining pit head or coal stockyard to the railway siding or beneficiation plant, for a specified period and at an agreed price, is classified under SAC 9966, i.e., Renting of Transport Vehicles. The service of transporting minerals within a mining area by vehicles deployed with drivers is considered a service of renting transport vehicles with operators, falling under Heading 9966, and not a service of transportation of goods by road. Consequently, it is not eligible for exemption under Sl. No. 18 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. On such rental services of goods carriages where the cost of fuel is included in the consideration charged from the recipient, the GST rate has been reduced from 18% to 12% with effect from 18.07.2022. Prior to 18.07.2022, it attracted GST at 18%. The applicable tax rate for this service is currently 12%. – 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 deposit work undertaken by the applicant and 6% supervision charges received for supervision and monitoring of deposit work related to transmission or distribution of electricity do not qualify for exemption under Entry 25 of N/N. 12/2017-CT (R) dated 28.06.2027 issued under GST Laws, as they are ancillary/incidental to the principal supply of transmission or distribution of electricity. The applicant is entitled to ITC of GST paid to contractors on execution of said work and GST paid on materials and equipment supplied free of cost out of its stock, as it is used for furtherance of business. However, reversal of ITC is required u/s 17(2) of CGST Act read with Rule 42 and 43 of CGST Rules. The deposit contribution works (support services) undertaken by the applicant are taxable supplies at 9% rate under SAC-998631, as per Entry SI No. 25 of Notification No. 11/2017-CT dated 28.06.2017. – 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:- 17-7-2024 – News – Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals Dated:- 17-7-2024 – GSTN wish to inform that NIC is releasing the integrated services from e-invoice-1 and e-invoice-2 portals on 18th July 2024 on sandbox portals and 1st Aug 2024 on the production portals. These portals run in parallel and now allow for seamlessly inter-operations. The highlights of the portal are as follows: ( https://einvoice1.gst.gov.in and https://einvoice2.gst.gov.in ) i. Both the portals (NIC-IRP 1 2) provide the web and API modes for e-invoice related services. ii. The taxpayers can use the same login credentials to operate e-invoice1 and e-invoice-2 portals. iii. In case of API, the same

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Goods and Services Tax – GST Dated:- 17-7-2024 – News – Refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports Dated:- 17-7-2024 – 1. GST Council has approved that application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports may also be processed by Tax Administration. Accordingly, Notification No. 12/2024-Central Tax dt. 10th July, 2024 has also been issued. GSTN is in the process of development of a separate category of refund application in FORM GST RFD-01, for filing an application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports. 2. However, till the time such separate categor

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Case-Laws – GST – Highlights – Impugned order and show cause notice quashed due to lack of digital or physical signature by issuing authority as mandated by Rule 26 of CGST Rules and TGST Act and Rules. Unsigned documents rendered ineffective. However, respondents' right reserved to initiate appropriate proceedings in accordance with applicable laws. – 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 – A reading of Section 169 of the Act makes it clear that any decision, order, summons, notice or other communication under the Act or Rules may be served on the assessee by making it available on the common portal. This statutory provision has to be read along with Section 146, which means that once a common portal is notified for the Act's purposes, actions like registration, tax payment, returns filing, and communication of notices, orders, etc., can be effected through the notified portal. The appellant's principal contention that the assessment order communicated through the notified portal was not known due to belated access was rejected. The appeal was 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 – Defective show cause notice lacking minimum details to establish adverse material received post specified date. Cancellation of registration and order-in-original set aside by High Court due to violation of principles of natural justice. Petition disposed, allowing opportunity for issuance of appropriate show cause notice to meet ends 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 – Impugned order set aside regarding interest liability; petitioner to discharge interest liability based on 700 days delay instead of 2080 days, subject to providing opportunity; petitioner to pay admitted interest within 15 days; petition disposed. – 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 – Appellate Authority affirmed impugned order without evidence regarding petitioner's intention to evade tax. Inconsistent approach rejecting petitioner's contention for lack of evidence while accepting department's contention despite absence of evidence. Appellate Authority must act judicially, adopting same approach towards assessee and department. Order quashed, petition allowed by way of remand. – 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 – Demand regarding disparity between e-way bills and GSTR 3B returns for 2018-19 to 2020-21 assessment periods. Petitioner stated disparity due to non-taxable supplies in e-way bills portal. Supporting documents not annexed to reply. Respondent did not refer to ITC-04 returns. Petitioner could have provided comprehensive explanation. Order set aside on condition of remitting Rs. 3,50,00,000/- towards disputed tax demand within six weeks and permitted to submit reply with relevant documents. 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 – Failure to file returns within thirty days after receiving best judgment assessment order u/s 62 of CGST/SGST Act proved fatal for appellant's challenge against cancellation of registration. Despite opportunity to nullify assessment by filing returns, appellant did not avail it. Statutory provisions grant sufficient opportunities to ensure assessment based on returns filed by assessee. No interference warranted with Single Judge's judgment dismissing appeal. – 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 – GST levy on royalty payable for mining minerals – Reliance placed on Division Bench decision holding no GST recovery on royalty until Constitution Bench decision. Petitioner directed to file reply within 4 weeks, respondent to adjudicate but keep order implementation in abeyance pending Supreme Court orders as per Division Bench direction. 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 – Non-compliance with principles of natural justice due to non-service of show cause notice. Consultant unaware of proceedings as notices uploaded on GST portal's “View Additional Notices and Orders” tab. Tax demand confirmed for non-response to show cause notice. Considering unawareness, petitioner granted opportunity to contest tax demand by remitting 15% of disputed tax within 15 days, quashing original order subject to this condition. Petitioner had already remitted 10% for statutory appeal. – 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 – Jurisdiction to condone delay in filing GST Appeal. Suspension of registration. Petitioner's lapse in not submitting tax returns for six consecutive months. Impugned order would prevent Petitioner from conducting business, necessitating fresh registration. Allowing re-hearing before State Tax Officer, subject to conditions for lapse, meets ends of justice. Petitioner's Accountant suffered from Covid-19 infection, preventing timely filing of returns. Token cost of Rs. 5,000/- imposed on Petitioner. Petition allowed in part. – 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 – Challenge to assessment order – time limitation. It is not required to dilate on taxability under GST regime from 01.07.2017. Matter requires consideration on merits. Prayer for quashing cannot be considered. However, balancing interests, impugned orders set aside by remitting cases to pass fresh orders, subject to depositing 10% of disputed tax within 30 days. Petition disposed by way of remand. – 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 – Impugned order quashed due to violation of principles of natural justice as second notice failed to mention time or date for personal hearing. Case remitted to pass fresh orders on merits and in accordance with law within 60 days, treating impugned order as addendum to preceding show cause notice, considering recovery of Rs. 38 lakhs from petitioner's account. – 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 – Respondent resorted to profiteering by not passing on benefit of GST rate reduction from 28% to 18% on cinema ticket prices above Rs. 100 during 01.01.2019 to 30.04.2019, profiteering Rs. 54,44,642 including GST. Directed to reduce prices commensurately, deposit profiteered amount of Rs. 54,44,642 with 18% interest equally in Central and State Consumer Welfare Funds as recipients unidentifiable. Violated Section 171(1) but penalty under 171(3A) not applicable retrospectively as provision inserted from 01.01.2020. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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