Goods and Services Tax

Common Services received at Head Office
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 28-2-2019 Last Reply Date:- 4-4-2019 Goods and Services Tax – GST
Got 4 Replies
GST
XYZ having manufacturing unit cum Head Office in Maharashtra and other units outside Maharashtra. Certain common services are received at Maharashtra on which 100% credit is taken at Maharashtra. In this situation, they can raise monthly invoice in the name of other units under the category of 'Business Support Service' based on the value mentioned in the invoices of the service provider for common services received at Maharashtra and by adding certain percentage of mark – up on it. Once this figure is arrived at, the same needs to be apportioned in t

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red by the Head Office in seeking opinion on an issue which is benefiting to all the branches located in various States then first challenge is reverse charge liability cannot on legal service cannot be paid under ISD registration. Thus for compliance the liability has to be paid under regular registration taken for Maharashtra . For doing this payment the invoice ahould be in the address of office/factory having regular registration number.
Then a cross charge invoice is to be raised from regular registration number to the ISD registration number . And the credit gets populated to ISD number then it can distribute the credit .
In order to overcome such challenges company is instead of taking ISD registration raises cross charge invoices

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GST : SUPPLY OF GOODS IN UNIT CONTAINERS
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 28-2-2019

In one of the advance rulings, assessee was supplying animal carcass in its natural shape in frozen state in different weights and sizes in bags. The ruling was sought on whether such supplier can be considered to have been supplied such goods in 'unit containers' .
In Re: Ahmednagar District Goat Rearing and Processing Cooperative Federation Ltd. 2018 (5) TMI 1393 – AUTHORITY FOR ADVANCE RULING – MAHARASTRA ;
In the instant case, Ahmednagar District Goat Rearing and Processing Co-op Ltd. was engaged in slaughtering and processing of sheep/goat meat and supplied these products to Army against tender. It supplied to Army sheep/ goat meat in carcass form i.e. the whole animal carcass in its natural shape in frozen state. Naturally, the carcass would be in different weight and sizes. Further, there was no fixed quantity & size in which these carcasses were d

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Ruling was also sought on taxability / exemption.
W.e.f. 1.7.2017, the relevant GST notifications provided for the following conditions:
* W.e.f. from 1st July, 2017 till 14th November, 2017:
* Must be frozen
* Must be packed in unit container
W.e.f. from 15th November, 2017 onwards:
* Must be frozen
* Must be packed in unit container
* Must bear a brand
The words 'unit container' have been defined similarly in both the Notification No.1-Integrated Tax (Rate) and Notification No, 2/2017- Integrated Tax (Rate) of the IGST Act as under –
The phrase "unit container" means a package, whether large or small (for example, tin, can, box, jar, bottle, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package.
The product, in question was sheep/ goat meat in carcass form i.e. the whole animal carcass in its natural shape. It is supplied in frozen state in LDPE and HDPE bags. The above defin

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nit container' and these products will be covered by schedule entry 4 of Notification No. 1 – Integrated Tax (Rate) during period 1.7.2017 to 13.11.2017. From 14.11.2017 onwards, the products would be covered under schedule entry 1 of Notification No. 1- Integrated Tax (Rate).
The appellate Authority for Advance Ruling has however modified this ruling vide Order dated 11.09.2018 and reported hereunder.
Appellate Ruling
Being aggrieved, the matter went to Appellate Authority for Advance Ruling, Maharashtra [In Re: Ahmednagar District Goat Rearing and Processing Cooperative Federation Ltd. 2018 (9) TMI 1184 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA ].
It was observed that the definition of 'unit container' is provided under the CGST Act as an explanation to the exemption Notification and we do not see any reason to resort to the similar definitions available in other Acts/Statutes. So, we will concentrate and restrict our scope to the definition available under the CGST A

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d goods about the fixed quantity/weight/number contained in the package which was not the case. At nowhere, it was mentioned that the said bags (LDPE or HDPE) should contain any fixed weight/quantity or number of the goods to be supplied. Just by mentioning the weight of the carcass (which may be one or two in number) on the outer packing in no way can be considered as the pre-determined quantity of the package. There is no doubt that the samples of bags produced before us during hearing are covered under 'package' as per the definition given in explanation to the notification but that package is not designed to hold any predetermined quantity.
The AAAR held that the whole (Sheep/Goat) animal carcass in its natural shape in frozen state in different weight and size packed in LDPE bags without mentioning the weight and one or two such LDPE bags further packed in HDPE bags being supplied to Army by appellant against tender shall not qualify as product put up in 'unit container'.
Sch

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Ashland India Pvt. Ltd Versus CCGST, Thane
Central Excise
2019 (3) TMI 181 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 28-2-2019
APPEAL NO: E/87741/2018 – A/85424/2019
Central Excise
Shri Ajay Sharma, Member (Judicial)
Appellants: Shri Sanjay Dwivedi, Advocate
Respondent: Shri Sanjay Hasija, Superintendent (AR)
ORDER
The core of dispute in the present appeal arising out of order-in-appeal nos. PVNS/250/APPEALS/ THANE/TR/2017-18/2423 dated 13/03/2018 is the invocation of the extended period of limitation as well as of penalty.
2. The brief facts of the matter are that the Appellant i.e. AIPL manufactured lubricating oil and grease, and their major input was base oil and additives. They delivered finished good to M/s. VCL for home consumption. In addition to supplying duty paid products to M/s. VCL for home consumption, the appellant also removed finished goods under bond for supplying to M/s. VCL for export to Nepal and for supply to SEZ/EOU. The Audit

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1944 read with Rule 15 of Cenvat Credit Rules 2004. On appeal filed by the Appellant the ld. Commissioner vide impugned order dated 13.03.2018 upheld the confirmation of demand and rejected the appeal filed by the Appellant.
3. I have heard ld. Counsel for the Appellant and Learned Authorised Representative for the Revenue and perused the record. Learned Counsel for the Appellant submit that the Appellant received services from two different supplier. These services were in the nature of erection, renting of equipment like crane, boom lift, staircase etc., on temporary basis and the said services were essential for carrying out production activity and therefore the Appellant was under bonafide belief that the disputed services are covered within the definition input service as per Rule 2(l) of Cenvat Credit Rules, 2004. He further submitted that immediately after raising objection by the Audit, the Cenvat credit on disputed services was reversed along with interest much before the is

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w cause notice is mere suppression of facts without anything further. There is no such allegation that the Appellants was under legal obligation to give invoice wise and item wise details of Cenvat credit which they have not given. Merely, mentioning malafide intention or suppression of facts or willful default is not sufficient. There has to have something more to prove malafide/ suppression/ willful default on the part of the Appellant. The Hon'ble Supreme Court in the matter of Uniworth Textiles Ltd. Vs CCE, 2013(288) ELT 161 (SC) has laid down that mere non-payment of duty is not equivalent to collusion or willful suppression of facts and in order to invoke extended period, specific and explicit allegation must be proved by the Revenue. In the present case, none of the authorities below have brought out any evidence on record to substantiate the allegation of suppression of fact or willful default on the part of the Appellant. All the transactions were duly reflected in excise retu

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5(75) ELT 721(SC) has laid down that suppression or mis-statement of facts must be willful to constitute a ground for the purpose of Section 11AC ibid and mis-statement or suppression of facts must be willful and the condition precedent for imposition of penalty is that the authority has to be satisfied that non-payment or short-payment of duty was deliberate with intention to evade payment of duty. Since on the facts of this case I have come to the conclusion that the authorities below have failed to brought on record any evidence to prove suppression on the part of the Appellant and the Appellant by his conduct has proved that there was no malafide intention on the part of the Appellant and it was only a bonafide error/belief on the part of the Appellant, therefore neither extended period of limitation is invocable in the facts of the present case nor penalty is liable to be imposed on the Appellant. The appeal is therefore allowed, with consequential relief, if any.
(Pronounced in

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M/s. SVV Transports Versus Commissioner of GST & Central Excise, Trichy
Service Tax
2019 (3) TMI 119 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 28-2-2019
Appeal No. ST/599/2012 – Final Order No. 40393/2019
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Ms. Amrutha Arvind, Advocate for the Appellant
Shri B. Balamurugan, AC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are engaged in providing the services of Site Formation and Clearance, Excavation and Earthmoving and Demolition Services. On scrutiny of records, it was noticed that they provided such services to M/s. Madras Cements Ltd. and received an amount of Rs. 16,93,372/- as service tax from October 2009 to January 2010 but did not pay the amount to the Central Government. On such allegation, show cause notice was issued to the appellant proposing to demand service tax along with interest and also for imposin

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est before issuance of show cause notice as pointed out by officers. To support this argument, she took assistance of the decision of the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. – 2012 (26) STR 3 (Kar.). It was also submitted by her that apart from mere allegation that there is suppression of facts with intention to evade payment of service tax, department has not been able to point out any positive act on the part of the appellant indulging in suppression of facts. There was no intention to evade payment of service tax which is very much clear since the appellant has discharged the service tax along with interest immediately and also had filed periodical returns. She therefore prayed that the penalty imposed under section 78 may be set aside.
3. The ld. AR Shri B. Balamurugan supported the findings in the impugned order. He submitted that this is a case where the appellant has collected the

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n particular no show cause notice has to be issued. The intent of this section is to reduce litigation and also to encourage the appellant to pay up the tax as and when pointed out by the department or coming to notice of the assessee. Thus, it is only intended for voluntary and easy compliance on the part of the assessee. The decision of the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. (supra) has held that when the assessee has paid up the demand of service tax along with interest no show cause notice and in particular no penalty can be imposed. The ld. AR has been at pains to argue that the appellant has not discharged the service tax even though collected by them and therefore it is implied that they have an intention to evade payment of service tax. It is submitted by ld. counsel that they had filed the returns within the due date and due to financial hardship they could not deposit within tim

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M/s. Reliable Computer Forms (P) Ltd. Versus Commissioner of GST & Central Excise, Chennai
Central Excise
2019 (3) TMI 108 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 28-2-2019
Appeal No. E/41632/2013 – Final Order No. 40399/2019
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri S. Ramachandran, Consultant for the Appellant
Ms. T. Usha Devi, DC (AR) for the Respondent
ORDER
Per Bench
The appellants are engage in manufacture of manifold business forms including printed/ blank continuous computer stationery forms and printed cut sheet forms. Based on investigation, it appeared to the department that the products would be correctly classifiable under 4820 of CETA, 1985. However, the appellants were clearing all these impugned goods under the premise that they would fall under SSI exemption under Notification 8/2003-CX. Pursuant to investigation, show cause notice was issued to the appellant i

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m are not liable to central excise duty in view of various case laws.
2.3 He submitted that the manufacture of computer stationery and manifold business forms are correctly classifiable under Chapter 4901 and not under 4820 as held by Mehra Computers Systems Ltd. as reported in 2017-TIOL-3852-CESTAT-MAD.
2.4 He submitted that the Hon'ble Supreme Court in Commissioner of Central Excise Vs. Gopsons Papers Ltd. – 2015 (324) ELT 5 (SC) has held that printed thermal paper rolls are classifiable only under 4901 of CETA and not under 481190.
2.5 So also the Tribunal in the case of Data Processing Forms Pvt. Ltd. vs. Commissioner of Central Excise – 2014 (311) ELT 161 (Tri. Ahmd.) has held that stationery forms and statutory forms like pre-printed forms such as excise invoice forms, commercial invoice forms, letter head forms, PF slip forms etc. would require to be classified under only 49.11 and not 4820. He also placed reliance on the following decisions:-
a. Dy. Chief Manager (P&S) Cent

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ted in the synopsis indicating the working of how the turnover by them in each of the years 2006 – 07 and 2007 – 08 and the threshold limit for SSI is as under:-
 
2006 – 07
2007 – 08
Totals sales turn over as per Balance Sheet
 
22448674
 
20960900
Less Deductions allowed SCN work sheet Annexure III
 
118501
 
85772
Balance turnover
 
21266173
 
20875128
Less: Turnover of exempted goods – Chapter 49 items
 
 
 
 
LIC intimation letter Ch. 49.01
1729002
 
3632947
 
Share certificates, bus ticket, Indian airlines boarding pass, hall tickets, kishintha Entry Ticket – Ch. 49.01
350844
 
180605
 
RC Book, Tax card – Ch. 49.01
2503209
 
0
 
ID Card – Ch. 49.01
46.79
 
0
 
FD Form – Ch. 49.01
 
 
41600
 
Hall ticket for Madras University – Ch. 49.01
 
 
180605
 
 
4587734
4587734
3855152
3855152
Balance Tu

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I limits
 
1 Crore
 
1.5 crore
In the circumstances, we find it appropriate to remand the matter back to the original authority who will take note of in such re-adjudication and apply the ratios laid down in the decisions cited above. The authority shall look into the claim and after applying the ratio of these case laws, it is found that the impugned goods are required to be classified under CETA 4901 and not under CETA 4820, the authority shall exclude the turnover thereof from the taxable turnover for the purposes of the SSI notification 8/2003-CX. In case after such exercise, the taxable turnover is found within SSI exemption limit, present duty demand will consequently get extinguished. In any case, in view of the issue having been mired in litigation, no penalty will be imposable even on any remnant duty liability if arises upon such re-adjudication. The impugned order is set aside and the appeal is allowed by way of remand on above terms.
(Dictated and pronounced

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Mohan Steels Corporation, G Mahesh, Rajendra Prasad Agarwal, Srujan Kumar, Ankit Agarwal, Ashish Kumar Jain, GVH Sambasiva Rao, M Srinivasa Gupta, K Ramesh Babu Versus CCCE & ST, Hyderabad-IV, CCT, Medchal – GST
Central Excise
2019 (3) TMI 34 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 28-2-2019
E/30306/2017, E/31246-31254/2017 – A/30273-30282/2019
Central Excise
Mr. M.V. Ravindran, Member (Judicial) And Mr. P. Venkata Subba Rao, Member (Technical)
Shri P. Rosi Reddy, Advocate for the Appellants
Shri B. Guna Ranjan, Superintendent/AR for the Respondents.
ORDER
Per: P.V. Subba Rao.
1. All these appeals are involve the same issue and hence are being disposed of together. The main appeal in this case is by the appellant M/s Mohan Steels Corporation (MSC) in appeal E/30306/2017 and other appeals are against co-noticees with respect to confiscation of the goods seized from their premises and the imposition of penalties.
2. Heard both sides and perus

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out of steel sheets which they purchased from M/s JSW Steel Ltd and have not discharged excise duty on them. Accordingly, a show cause notice dated 30.06.2015 has been issued to the appellant seeking to recover appropriate amount of Central Excise duty invoking extended period of limitation on the profiles manufactured and cleared by them along with interest. It was also proposed to impose penalties under Sec.11AC of Central Excise Act.
4. Learned counsel for the appellant submits that they are engaged in trading of JSW steel sheets. These sheets come in large coils which they need to uncoil, cut into sizes required by the customers and sell them. It is not in dispute that such cutting of sheets into smaller sheets does not amount to manufacture. In some cases, they also take these sheets and put them through a machine to corrugate them (create profiles) before selling them. They do not dispute that they are undertaking this activity. He, however, submits that this activity was well w

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corrugation does not amount to manufacture but it was a service which they were rendering to their clients as per their requirement. They were collecting service charges for corrugation and have been paying service tax on such charges. The payment of service tax on these services under the head 'business auxiliary services' has been duly reflected in all their ST-3 returns.
5. Learned counsel would, therefore, submit that the department cannot allege that they have suppressed or wilfully misstated or violated any Act or Rules with an intention to evade payment of duty. Therefore, the entire demand covering the period January, 2013 to October, 2014 issued vide show cause notice dated 30.06.2016 is completely time barred. He, therefore, submits that:
(a) The activities which are undertaken cannot be held as amounting to manufacture.
(b) Even if it is held that the activities amount to manufacture, these activities are completely within the knowledge of the department and have been dec

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gained anything by evading payment of duty.
(e) As the demand itself is not sustainable, neither will the demand of interest nor imposition of penalties sustain.
(f) As the demand on the main appellant is not sustainable, the proposals for confiscation of goods and imposition of penalties on the co-noticees also do not sustain.
6. Learned departmental representative reiterates the arguments in the impugned orders and asserts that it is now well settled that in the case of Proflex Systems [2017 (353) ELT 142 (Gujarat)] that the sheets in coils and those cut and corrugated to make them suitable for use of making roofs are distinct commodities and they cannot be said to be the same. This decision of the Hon'ble High Court of Gujarat has been upheld by the Hon'ble Supreme Court in the case of Proflex Systems v Commissioner [2017 (355) ELT A83]. As a new distinct commodity as known to the market has come into existence, the corrugated roofs so manufactured by the appellant from the shee

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ought any clarification from the department whether this activity amounts to manufacture. It was incumbent upon the appellant to have disclosed the true nature of the activities and pay excise duty which they have not done. Therefore, the demand for excise duty and interest as well as the confiscation an penalties are liable to be upheld.
7. We have considered the arguments on both sides and perused the records. The short issues to be decided are as follows:
(1) Whether the appellant has undertaken an activity which amounts to manufacture in uncoiling the sheets, cutting them to sizes and corrugating them into form to be used as roofs.
(2) Whether the appellant is liable to pay excise duty on such activity.
(3) Whether a demand can be raised invoking extended period of limitation.
(4) Whether confiscation of the goods from the appellants is sustainable and
(5) Whether penalties can be imposed upon the appellants.
8. On the first issue, we find that the appellant has purchased st

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e find that the appellant was registered with the Central Excise department both as a trader and also as a service provider. He has been paying service tax as a service provider on the corrugation part of his work. The service tax payable on the corrugation is 12% of the service charges which he collected for such corrugation. He has been reflecting this activity in the ST-3 returns under these circumstances we find it inconceivable that even with minimum scrutiny of the service tax returns, the range could not be aware of the nature of the activity undertaken by him on which he is paying service tax. The contention of the learned departmental representative that he has not declared the nature of goods correctly in the invoices does not carry their case any further because the invoices were anyway not required to be submitted with the ST-3 returns. However, when a return is filed with the range officer or when registration is taken from the range officer, it is not inconceivable that t

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Input Tax Credit Allowed for Plantation and Gardening Services in Plant Areas, Including Mining Sites and Business Premises.
Case-Laws
GST
Input Tax credit (ITC) – Services availed in relatio

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Input Tax Credit Denied for Employee Housing Costs: No ITC on Goods/Services for Maintenance of Residential Accommodation.
Case-Laws
GST
Input Tax credit (ITC) – provision of housing to its employees by the assessee is nothing but a perquisite – ITC shall not be allowed in respect of tax paid on goods and services procured by it for management, repair, renovation, alteration or maintenance services pertaining to residential accommodation for its employees in township/colony.
TMI Upd

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Clarification: IGST Rate on Imported Equipment for Eligible Institutions; Exemption Not Claimable by Third Parties.
Case-Laws
GST
Rate of IGST – Imported of specified Equipments delivered to

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Gudakhu Classified Under Tariff Item 2403 99 90 as “Other” Based on Composition, Character, and Use.
Case-Laws
GST
Classification of goods – Gudakhu – it can be classified and rightly so unde

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KRISHNA PRASAD S Versus STATE TAX OFFICER, THIRUVANANTHAPURAM, THE COMMISSIONER STATE GST DEPARTMENT, THIRUVANANTHAPURAM, STATE OF KERALA REPRESENTED BY SECRETARY (TAXES), THIRUVANANTHAPURAM AND CENTRAL BOARD OF EXCISE CUSTOMS DEPARTMENT OF REVENUE, NEW DELHI
GST
2019 (3) TMI 487 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 27-2-2019
WP(C). No. 19581 of 2018
GST
DAMA SESHADRI NAIDU
For The Petitioner : ADVS. SRI. U. BALAGANGADHARAN AND SRI. V. JAYANANDAKUMAR
For The Respondents : DR. THUSHARA JAMES, GOVT. PLEADER
JUDGMENT
The petitioner, a trader, has sought the following reliefs:
i. Call for the records leading to Ext.P1 orders and issue writ of certiorari quashing the same as they are passed beyond

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INGRAM MICRO INDIA PRIVATE LIMITED Versus ASSISTANT COMMISSIONER SGST DEPARTMENT, SPECIAL CIRCLE-III, ERNAKULAM AND DEPUTY COMMISSIONER, COMMERCIAL TAXES, THEVARA, KOCHI
VAT and Sales Tax
2019 (3) TMI 443 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 27-2-2019
WP(C). No. 28903 of 2018
CST, VAT & Sales Tax
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADV. SRI. V. M. KRISHNAKUMAR
For The Respondent : ADV. GOVERNMENT PLEADER DR. THUSHARA JAMES
JUDGMENT
Facts: The petitioner, a dealer under the Kerala Value Added Tax Act 2003, deals in IT products. It faces assessment proceedings for one year, but claims a refund for another. Thus, this writ petition concerns two assessment years: 2007-08 and 2016-17.
2. In 2012, dissatisfied with the petitioner's self-assessment for the AY 2007-08, the assessing officer re-opened the assessment and passed an order imposing a tax liability. The petitioner then challenged it in a statutory appeal. Finally, throu

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ly on 04.07.2018, the assessing officer passed two orders: the Ext.P10 order for the assessment year 2016-17; and the Ext.P11 order for the assessment year 2007-08.
5. As seen from the record, the Ext.P10 order revises the petitioner's returns for AY 2007-08 and, then, under Section 25(1) of the Act determines the petitioner's tax liability for AY 2016-17, too. On the other hand, through the Ext.P11, the assessing officer grants a tax refund to the petitioner. Yet he adjusts that amount towards the petitioner's alleged liability under the Ext.P10.
6. Thus, the tax consolidation runs as follows: For the AY 2016-17 the tax assessed under Section 25(1) of the Act is Rs. 3,31,21,344/-; and the refund quantified for the AY 2007-08 is Rs. 2,77,34,985/-. Eventually, the assessing officer issued the Ext.P13 demand notice for the balance amount of Rs. 62,48,176/-. Assailing the Exts.P10, P11 and P13 orders, the petitioner has filed this writ petition.
Submissions:
Petitioner's:
7

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in terms of Section 89(3) of the Act, the amount must have fallen actually due by the date the assessing officer adjusted the tax. To support this contention, she has drawn my attention to Section 31(2) of the KVAT Act. Then Ms. Binoy stresses that the assessing authority could take steps to recover the amount found due from the petitioner only after issuing a notice and giving “not less than fifteen days' time” thereafter. Here, instead, the assessing officer adjusted the amount instantaneously, with no notice under Section 31(2), she adds.
10. Ms. Binoy has also contended that had the petitioner gone in appeal, it would have warded off any departmental steps for recovery by paying 20% of the assessed tax. But now the petitioner has been compelled to pay over 80% in the name of adjustment, which is unconscionable.
The Respondents':
11. On the other hand, Dr. Thushara James, the Government Pleader, to begin with, has raised a technical issue: the petitioner has an efficacious

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es, he has passed the orders of adjustment. So, on neither count can the orders be found fault with.
Reply:
15. In reply, Ms. Binoy, the petitioner's counsel, has drawn my attention to the respondent's counter; she contends that the Department itself has admitted that the delay was due to administrative reasons, including that the incumbent assessing officer has assumed charge recently.
16. Heard Ms. Surya Binoy, the petitioner's counsel, and Dr. Thushara James, the Government Pleader.
Discussion:
17. Simple and straight, the petitioner, an assessee under the KVAT Act, was found entitled to refund for AY 2007-08; it was also found liable under Section 25(1) of the Act for AY 2016-17. As the amount due from it was more than the amount due to it, the assessing authority adjusted the amount to be refunded and, then, demanded the balance amount. Aggrieved, the petitioner has filed this writ petition.
18. As much turns on-the petitioner's counsel asserts so- Sections Section

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tioner contends that, with the instantaneous adjustment, it has lost the chance of paying the tax later. Of course, it also argues that had it preferred an appeal, it would have got off by paying 20% of the demanded tax and would have had all recovery stayed until the appeal was disposed of.
20. Now, we will see what Section 89 mandates. And it reads:
“89. Refunds.- (1) When an assessing authority finds, on completion of annual assessment, that a dealer has paid tax in excess of what is due from him, it shall refund the excess to the dealer.
(2) When an assessing authority receives an order from any appellate or revisional authority or any officer authorised under sub- section (5) of section 47, to make a refund of tax or penalty or cash security paid by a dealer or any other person, it shall effect the refund to such dealer or such other person, as the case may be.
(3) Notwithstanding anything contained in sub-section (1) and (2), the assessing authority shall have power to a

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authority or any officer under subsection (5) of section 47, to refund tax or penalty to a dealer, he must comply with that.
22. But the assessing authority has the power to adjust the amount due to be refunded towards the recovery of any amount due, on the date of adjustment, from the dealer. If the assessing authority delays refund without justification, the dealer may earn interest @10% p.a.
23. The question here is: Was the petitioner due to pay any amount to the Department “on the date of adjustment”?
24. The petitioner, indeed, asserts that its liability under Section 39(3) of the Act-that is, its obligation to pay tax- materialises only 15 days after its receiving a notice from the Department. The assessing authority's adjusting the amount, the petitioner further contends, before that eventuality is illegal.
25. Attractive as the petitioner's submission is, I am afraid it fails to pass the judicial muster. Section 31(1) declares that every dealer liable to pay tax for any r

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Shri Ashok Khatri, Director General of Anti-Profiteering, Central Board of Indirect Taxes & Customs Versus M/s S3 Infra Reality Pvt Ltd.
GST
2019 (3) TMI 369 – NATIONAL ANTI-PROFITEERING AUTHORITY – TMI
NATIONAL ANTI-PROFITEERING AUTHORITY – NAPA
Dated:- 27-2-2019
Case No. 12/2019
GST
Sh. B.N. Sharma, Chairman, Sh. J.C, Chauhan, Technical Member And Ms. R. Bhagyadevi, Technical Member
None for the Applicant No. 1., Shri Manoranjan, Assistant Commissioner, DGAP for the Applicant No. 2.
Shri Ankur Agarwal, Authorised Representative and Ms. Alka Gupta, CA for the Respondent.
ORDER
1. This Report dated 28.11.2018, has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the present case are that a complaint dated 04.04.2018 was filed before the Haryana State Screening Committee on Anti-Profiteering by the Applicant No. 1 allegin

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was passed on by him to his recipients and also asked him to suo-moto determine the quantum of benefit which was not passed on. The Respondent had submitted replies vide letters dated 20.09.2018, 10.10.2018, 16.10.2018, 01.11.2018, 12.11.2018, 13.11.2018, 14.11.2018, 15.11.2018, 19.11.2018, 22.11.2018 and 26.11.2018 stating that he was in the business of construction of flats under the Affordable Housing Scheme sanctioned under the Haryana Affordable Housing Policy, 2013 in Sector-82, Faridabad. The Respondent had also stated that after implementation of the GST w.e.f. 01.07.2017, the ITC on purchase of materials during July, 2017 and August, 2017 was negligible and he had raised the first demand without giving the benefit of ITC by changing GST @ 12% on 14.08.2017. He had further stated that he had raised the next demand on 14.02.2018 by levying GST @ 8% due to change in the rate of tax as per the Notification issued on 25.01.2018 and had given the benefit of ITC provisionally and in

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sh.
(c) Copies of Tran-1 returns for transitional credit availed.
(d) Copies of VAT & ST-3 returns for April, 2016 to June, 2017.
(e) Copies of all demand letters and sale agreement/contract issued in the name of Shri Ashok Khatri.
(f) Tax rates-pre-GST and post-GST.
(g) Copy of Balance Sheet for FY 2016-17 & FY 2017-18.
(h) Copy of Electronic Credit Ledger for 01.07.2017 to 31.08.2018.
(i) CENVAT/Input Tax Credit register for April, 2016 to August, 2018.
(j) Details of taxable turnover and input tax credit for the project “Auric City Homes”.
(k) List of home buyers in the project “Auric city Homes” along with buyers of commercial shops.
(l) Copy of Project Report of RERA.
(m) Reconciliation of turnover reported in GSTR-3B with list of home buyers.
(n) Details of unsold flats and unsold commercial shops.
(o) Copies of contract and demand letters for new bookings made during the period August, 2018 to October, 2018 reflecting passing of 2% benefit of GST input credit to new

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96
6
Date of Draw+24 months
11.09.2017
12.50%
3,12,296
 
 
37,476
3,49772
7
Date of Draw+30 months
01.03.2018
12.50%
3,12,296
-12,492
 
24,984
3,24,788
8
Date of Draw+36 months
27.08.2018
12.50%
3,12,296
 
 
24,984
3,37,280
 
Total
 
100.00%
24,98,369
-12,492
21,861
87,443
25,95,182
7. The DGAP has also submitted that unlike other cases in which allegation of not passing on the benefit of ITC is generally contested but in the present case the Respondent had suo-moto admitted that there has been benefit of ITC post GST and he had passed on such benefit to the above Applicant by reducing the demand raised in the month of February, 2018 by Rs. 12,492/- which was 1.23% of the amount collected post-GST. The Respondent had also assured that the final input tax credit benefit would be provided at the time of possession.
8. The DGAP in his Report has further submitted that prior to 01.07.2017, i.e., in the pre-GST era, th

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o August, 2018), the details of the ITC availed and the taxable turnover during the above periods were as under:-
Table B
(Amount in Rs.)
S. No.
Particulars
April, 2016 to March, 2017
April, 2017 to June, 2017
Total (pre-GST)
01.07.2017 to 24.01.2018
25.01.2018 to 31.08.2018
Total (Post-GST)
1
CENVAT of Service Tax Paid on Input Services used for Commercial Shops A
19,06,672
1,49,961
20,56,633
 
 
 
2
Input Tax Credit of VAT Paid on Purchase of Inputs B
1,36,94,480
32,37,996
1,69,32,476
 
 
 
3
Total CENVAT/Input Tax credit Available (C) = (A+B)
1,56,01,152
33,87,957
1,89,89,109
 
 
 
4
Input Tax Credit of GST Availed (D)
 
 
 
2,03,84,595
1,40,08,003
3,43,92,598
5
Gross Taxable Turnover for VAT as per Annex-18 (E)
33,58,48,922
7,79,19,542
41,37,68,464
 
 
 
6
Abated Taxable Turnover reported in VAT Return (F)
18,74,58,580
4,34,91,837
23,09,50,417
 
&

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ove Table, it was clear that the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period from April, 2016 to June, 2017 was 3.65% and during the post-GST period w.e.f. July, 2017 to August, 2018, it was 6.49%. The Report has further claimed that this data duly confirmed that post-GST, the Respondent had benefited from additional ITC to the extent of 2.84% [6.49% (-) 3.65%] of the taxable turnover. The DGAP has also noted that the Central Government, on the recommendation of the GST Council, had levied 18% GST, effective rate of which was 12% in view of 1/3rd abatement on the value of land on construction service vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. He has further noted that the actual GST rate on construction service in respect of affordable and low-cost housing was further reduced from 12% to 8%, vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018. In view of the change in the GST rate after 01

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ax rate post-GST (%)
D
 
6.75%
2.75%
 
5
Increase in input tax credit availed post-GST(%)
E= 6.49% less 3.65%
 
2.84%
2.84%
2.84%
 
Analysis of Increase in input tax credit: (Amount in Rs.)
6
Base Price collected during July, 2017 to August, 2018
F
 
20,63,35,174
27,05,32,230
47,68,67,404
7
GST Collected over Basis Price
G= F*12% or 8%
 
2,47,60,221
2,16,42,578
4,64,02,799
8
Total Demand collected
H=F+G
 
23,10,95,395
26,28,49,115
46,33,24,370
9
Recalibrated Basis Price
I= F* (1-E) or 97.16% of F
 
20,04,75,252
26,28,49,115
46,33,24,370
10
GST @12%
J=I*12%
 
240,57,031
210,27,929
450,84,960
11
Commensurate demand price
K=I+J
 
22,45,32,286
28,38,77,044
50,84,09,330
12
Excess Collection of Demand or Profiteering Amount
L=H-K
 
65,63,109
82,97,765
1,48,60,874
10. The DGAP has also intimated that, it was quite clear from the above Table that the additional ITC of 2.84% of

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on the base profiteered amount of Rs. 58,59,919/-. He has further claimed that the amount of benefit of ITC that needed to be passed on by the Respondent to the recipients or in other words, the profiteered amount realised by him during the period between 25.01.2018 to 31.08.2018, come to Rs. 82,97,765/- which included 8% GST on the base profiteered amount of Rs. 78,83,115/- and therefore, the total profiteered amount during the period 01.07.2017 to 31.08.2018 was Rs. 1,48,60,874/- which included GST (@ 12% or 8%) on the base profiteered amount of Rs. 1,35,43,034/-. The home buyer and unit no. wise break-up of this amount was provided in Annex-21 by the DGAP attached with his report, which was inclusive of Rs. 23,772/-(including GST on the base amount of Rs. 21,683/-) which was the profiteered amount in respect of the Applicant No. 1, mentioned at serial No. 65 of Annex-21 of the DGAP's report.
12. The DGAP has also submitted that on the basis of the details of the outward supplie

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r Benefit to be passed on as per Annex-22
3
Other Buyers (Residential)
100
44,966
6,33,27,248
20,00,231
37,76,938
-17,76,707
Excess Benefit passed on.
4
Other Buyers (Residential)
29
13,477
–
–
 
-2,72,610
No Consideration Paid Post-GST, However, Respondent passed on benefit.
5
Other Buyers (Residential)
10
4,116
–
–
–
–
Cancelled Units
6
Other Buyers (Residential)
26
11,038
–
–
–
–
Unsold Units
 
Total Residential (A)
816
3,81,640
46,73,82,690
1,45,59,184
1,11,33,581
34,25,603
 
7
Commercial Shop Buyers
13
4,438
94,84,715
3,01,690
–
3,01,690
Benefit to be passed on as per Annex-23
8
Commercial Shop Buyers
9
2,901
–
–
–
–
No Consideration Paid Post-GST
9
Commercial Shop Buyers
14
7,971
–
–
–
–
Unsold Units
 
Total Commercial (B)
 
36
15,310
94,84,715
3,01,690
–
3,01,690
 
 
Grand Total (C)=(A)+ (B)
852
3,96,950
47,68,67,405
1,48,60,874
1,11,33,581
37,27,293
&nbs

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of Section 171 of the CGST Act, 2017 had been contravened by the Respondent in as much as the additional benefit of ITC @2.84% of the base price received by the Respondent during the period w.e.f. 01.07.2017 to 31.08.2018, has not been passed on to the Applicant and other recipients by the Respondent. He has further claimed that on this account, the Respondent had realized an additional amount of Rs. 23,772/- (Sr No. 1 of table- 'D' in para-19) from the above Applicant which included both the profiteered amount @2.84% of the taxable amount (base price) and GST on the said profiteered amount, however, the Respondent had suo-moto passed on Rs. 12,492/- as per the demand letter dated 10.02.2018 issued to the Applicant, and therefore, the Respondent had profiteered by an amount of Rs. 11,280/- (23,772/- (-) 12,492/-). Further, the Report has stated that the Respondent had also realized an additional amount of Rs. 57,65,329/- as mentioned at Sr. No. 2 & 7 of the Table- 'D' a

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plicants and the Respondent on 19.12.2018, which was postponed to 07.01.2019 on the request of the Respondent. On 07.01.2019 the Applicant No. 1 did not appear but the DGAP was represented by Shri Manoranjan, Assistant Commissioner while Mr. Ankur Agarwal, Authorised representative and Ms Alka Gupta, CA appeared on behalf of the Respondent. Further hearings were held on 13.02.2019 and 18.02.2019. The Respondent during the hearing submitted that the total turnover of his project was 175 Crores and the project was an affordable housing project. He also submitted that the project had started in August, 2015 and the possession of the flats would be given by July, 2019. The Respondent accepted the Report submitted by the DGAP and said that he was in the process of passing on the ITC benefits as had been mentioned in the DGAP's report to all the recipients/buyers.
16 The Respondent further admitted that the amount of profiteering as calculated by the DGAP would be passed on to all the b

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hat if any further benefit of ITC would be available to him it would be passed on at the time of possession of the flats. It has also been submitted that he had instructed his bank to take necessary action and cheques will be released as and when the bank NOC is issued to the buyers or to the Respondent.
17. On 18.02.2019 the Respondent further submitted that in respect of 188 home buyers of residential units out of the total profiteered amount of Rs. 42,30,691 an amount of Rs. 18,19,582 was passed on and the balance amount of Rs. 24,11,109 along with interest of Rs. 2,03,716 (total Rs. 26,14,825) had been paid through cheques which were filed by him as evidence. He also promised to pay all the 13 buyers of commercial units the entire profiteered amount of Rs. 3,01,690. In respect of 177 home buyers the Respondent stated that since the balance instalments were pending from these buyers the profiteered amount for each one of them will be adjusted against their pending instalments. In t

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s under:-
“It shall be the duty of the Authority –
(i) to determine whether any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit 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 input tax credit to the recipient by way of commensurate reduction in prices;
(iii) to order;
(a) reduction in prices;
(b) return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen percent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount not returned, as the case may be, in case the eligible person does not claim return of the amount or is not identifiable, and depositing the same in the Fund referred to

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units thus a total amount of Rs. 47,68,67,405/ after introduction of GST has been collected by him
21. In the present case as has been noted by the DGAP the Respondent has availed benefit of additional ITC of 6.49% (post GST) as compared to 3.65% (pre-GST) as can be seen from the table given below. Based on the data and the documents filed by the Respondent, this percentage has been rightly arrived at by the DGAP by taking into account the benefit of credit available during pre GST (April 2016 to June 2017) to the taxable turnover received during the said period. Similarly for the post GST period (01 07.2017 to 31.08.2018) the percentage of ITC has been arrived at by taking into account the credit available as against the taxable turnover received during the same period. Based on the above analysis it is clear that the Respondent had benefit of ITC of Rs. 1,59,38,195 (3.6%) in pre GST when compared to Rs. 3,09,70,006 (6.49%) in the post GST period thus providing him the net benefit of

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as also correctly calculated the profiteered amount as Rs. 65,63,109 from all the buyers for the period w.e.f. 01.07.2017 to 24.01.2018 and an amount of Rs. 82,97,765 for the period between 25.01.2018 to 31.08.2018 taking into account the GST effective rate of 8% and net benefit of ITC of 2.84%. Thus the Respondent has profiteered total amount of Rs. 1,48,60,875 for the period from 01.07.2017 to 31.08.2018 in respect of all the 651 residential units and 13 commercial units. The above calculations of the profiteered amount has been duly admitted to be correct by the Respondent and he has willingly accepted to pass on the benefit of additional ITC which had become due to him after coming into force of the ITC.
23. From the documents placed on record and the DGAP's report it is evident that the Respondent has sold 780 units out of 816 residential units, out of which for 29 units there was no consideration paid after introduction of GST, hence the profiteered amount has to be calculat

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the buyers of these commercial units. Accordingly out of total profiteered amount of Rs. 1,48,60,874 an amount of Rs. 90,84,264 has already been passed on as is evident from Annexure 17 of the DGAP's Report where intimations have been filed by the Respondent stating the details of the payments regarding ITC benefit paid to their buyers. The balance amount of Rs. 57,76,610 is to be passed on to the identified buyers as per the following table:-
24. In view of the above facts this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 31.08.2018 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent as and when the remaining residential/commercial units are sold. The Respondent's Annexures dated 19.02.2019 and 25.

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d through Cheque
474
43,14,358/-
Credited through Ledger Entries
177
11,60,562/-
Total
651
54,74,920/-
Commercial Units
13
3,01,690/-
Grand Total
 
57,76,610/-
25. It is evident from the above that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him under the above Policy in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus realized more price from them than he was entitled to collect and has also compelled them to pay more GST than that they were required to pay by issuing incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 122 of the above Act read with rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
26. Further the Authority as per Rule 136

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M/s. HEERA CONSTRUCTION CO. PVT. LTD. Versus THE COMMISSIONER CENTRAL GST AND CENTRAL EXCISE, THIRUVANANTHAPURAM, THE ASSISTANT COMMISSIONER CENTRAL TAX AND CENTRAL EXCISE, THIRUVANANTHAPURAM, THE BRANCH MANAGAR STATE BANK OF INDIA, THIRUVANANTHAPURAM AND CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, KERALA
Service Tax
2019 (3) TMI 249 – KERALA HIGH COURT – 2019 (366) E.L.T. 270 (Ker.)
KERALA HIGH COURT – HC
Dated:- 27-2-2019
WP(C). No. 1400 of 2019
Service Tax
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADVS. SRI.T.M.SREEDHARAN (SR.) MT.DIVYA RAVINDRAN SMT.NISHA JOHN AND SRI. R. BHASKARA KRISHNAN
For The Respondents : ADV. SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS SRI A KUMAR, SC FOR SBI

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ore, in instalments. In fact, the petitioner wants ten instalments.
3. The learned Senior Standing Counsel for the respondent nevertheless submits that there had been occasions earlier when this Court extended the time for an appellant to comply with the pre-deposit. But granting such long rope as providing ten instalments, he asserts, is impermissible. About the delay, the learned Standing Counsel wants this Court to leave that to the discretion of the Tribunal.
4. Under these circumstances, as far as the delay is concerned, the Tribunal will decide the issue on merits. And about the mandatory pre-deposit, because of the financial hardship the petitioner has pleaded, the petitioner will pay the amount of pre-deposit in five equal monthly

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M/s. Inspirage Software Consulting Pvt. Ltd. Versus The Commissioner GST & CCE (Chennai South)
Service Tax
2019 (3) TMI 48 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 27-2-2019
Appeal No. ST/42525/2018 – FINAL ORDER No. 40381/2019
Service Tax
Shri P. Dinesha, Member (Judicial)
Shri G. Thangaraj, Consultant, for the Appellant
Shri M. Jagan Babu, AC (AR) for the Respondent
ORDER
Heard Shri G. Thangaraj, Ld. Consultant for the assessee and Ld. DR, Shri M. Jagan Babu, AC for the Revenue.
2. Ld. Consultant appearing for the assessee contended that there are two issues involved viz., i) denial of cenvat credit on “House Keeping Services'', and ii) refund of unutilized input service credit under Rule 5 of CCR re

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(10) GSTL 172 (Mad.), Integra software Services Pvt. Ltd. Vs. CCE, Pondicherry – 2017 (48) STR 137 (Tri.-Chen.) and also the decision of the Hon'ble High Court of Gujarat in the case of Cosmonaut Chemicals Vs. UOI – 2009 (233) ELT 46 (Guj.) in his support.
3. Per contra, Ld. DR supported the findings of the lower authorities, also pointed out that the date of application is 12.07.2017, which has been duly considered and refund has been worked out as on 12.07.2017. He further pointed out that as per the Notification No. 27/2012-CE dated 18.06.2012, the adjudicating authority has duly considered the balance of Cenvat credit available as on the last day of the quarter that available on the day of filing the refund claim which is on 12.07.201

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g of the refund claim was 12.07.2017 only as against which the appellant contends that there was an attempt to file the refund claim on 27.06.2017 but, the said application was accepted only on 12.07.2017 after being advised by the Assistant Commissioner to wait for some time on account of Revenue Offices being re-located on account of migration to GST. Ld. Consultant thus contends that the delay was not in the date of filing but, rather, is due to the delay in receipt of its application on account of Department's reorganization.
4.4. I find force in the appellant's contention that the delay is there only on account of the receipt of appellant's application for refund and this fact is duly supported by the Legacy Cell letter dated 18.07.20

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Capital Asset – Plant and Machinery introduced by incoming partner in partner ship firm
Query (Issue) Started By: – anuja bhandari Dated:- 26-2-2019 Last Reply Date:- 21-3-2019 Goods and Services Tax – GST
Got 1 Reply
GST
A proprietor firm unregistered in GST has plant machinery in Assets. The proprietor in individual capacity will be introduced as partner in partnership firm and will introduce the plant and machinery as capital introduction. WDV of plant and machinery is 1 crore. P

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INPUT CREDIT ON REPAIRS
Query (Issue) Started By: – SURYAKANT MITHBAVKAR Dated:- 26-2-2019 Last Reply Date:- 3-3-2019 Goods and Services Tax – GST
Got 7 Replies
GST
We have done repair work like painting ,Wall repairs, putting tiles, etc. in our factory gala and amount debited to repairs & Maintainnace.
Can we avail Input Credit for such transaction.
Reply By Ganeshan Kalyani:
The Reply:
in my considered view, input tax credit is eligible.
Reply By Alkesh Jani:
The Reply:
Sir,
If the said repairs is with regards to factory (civil structure) it falls within the ambit of Section 17(5)(d) of CGST Act,2017 and explanation given may also be taken into consideration. However, as the factory (civil structure) has been booked as

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):-
1. If capitalised to such immovable property – ITC is ineligible under section 17(5)(c)/(d) of CGST Act,2017.
2. If not capitalised to such immovable property – ITC is eligible.
Reply By Ganeshan Kalyani:
The Reply:
Sri Alkesh Ji, the repair to the capitalised asset not necessarily capitalised . If the benefit out of the repair is not spread over the year then it is becomes a revenue expenditure. In such cases credit is eligible as specifically provided in section 17 (5) of the CGST Act. Thanks.
Reply By Ganeshan Kalyani:
The Reply:
As reagard capitalisation of an asset INDAS need to referred.
Reply By KASTURI SETHI:
The Reply:
How this decision is in favour of the assessee ? That is to be analysed.
2018 (17) G.S.T.L. 690 (A

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Damaged goods
Query (Issue) Started By: – Bharath Kumar Dated:- 26-2-2019 Last Reply Date:- 27-2-2019 Goods and Services Tax – GST
Got 5 Replies
GST
Goods are damaged/expired while receiving by the recipient dealer. Goods are not returned to the supplier but the supplier issues non inventory credit memo at certain percentage as damage compensation purpose.
In this situation what will be the GST impact in all modes ?
Reply By AKReddy andCO:
The Reply:
Damage or expiry should be treated as sales returns only by the supplier and should issue a credit note. It will be a debit note to the receiver of goods. As he up loads the credit note in the GST portal, you have to reverse the ITC if already availed. The experts may please co

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Court Rules Provisional Attachment of Bank Accounts Unjustified; Revenue Interest Secured by Reversed Input Tax Credit.
Case-Laws
GST
Attachment of bank accounts – input tax credit – consider

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Pre-import condition for tax exemption in Foreign Trade Policy 2015-2020 declared invalid and ultra vires.
Case-Laws
Customs
Paragraph 4.14 of the Foreign Trade Policy whereby a condition of

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ESTABLISHMENT OF PROFITEERING ‘MUST’ FOR CONTRAVENTION OF SECTION 171 OF GST LAW
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 26-2-2019

While number of complaints being filed before National Anti-profiteering Authority (NAA) are on rise, still in the majority of cases, the case for contravention of section 171 of the GST law is not established as profiteering has to be established or substantiated , i.e., not passing of benefit of tax rate reduction and/ or input tax credit.
The business entities need not worry about such complaints as the NAA shall adjudicate such cases only on the basis of documentary evidence and facts following principles of natural justice. Few of such complaints recently adjudicated go on to prove that the NAA does not proceed with the pre-determined mindset that each complaint received by it is a fit case of profiteering where section 171 has been contravened.
* Kerala State Screening Committee on Anti-profiteering & DGAP

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2017
5%
345/-
–
5.
Impact Shirts 1500 H/S M.R.P. 689
211 dated 02/06/2017
2%
475/-
493 dated 14/08/2017
5%
475/-
–
6.
Impact Shirts 1500 F/S M.R.P. 699
211 dated
02/06/2017
2%
482/-
493 dated 14/08/2017
5%
482/-
–
These shirts were exempted from Central Excise duty, vide Notification No. 30/2004-CE dated 09.07.2004 and attracted only Central Sales Tax (CST) @ 2%. After implementation of the GST w.e.f. 01.07.2017, the tax rate of these products was fixed 5%. The rate of tax on these shirts was actually increased from 2% in the pre-GST era to 5% in the post-GST era. Moreover, the pre-GST and post-GST base prices (excluding tax) had remained the same. Therefore, the provisions of Section 171 of the CGST Act, 2017 have not been contravened and the allegation of profiteering by the supplier was not established.
The NAA noted that it is clear from the perusal of the facts of the case that there was no reduction in the rate of tax on the above products w.e.f. 01.07.2

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ST period) were relied upon:
S.No.
Description of the product supplied
Pre GST Invoice No. 140217101517 dated 15.06.2017
Post GST Invoice No. 14021702034 dated 22.07.2017
Base price
Total Tax
(Rs)
Total Price (Rs.)
Base price (Rs.)
GST
(Rs.)
Total Price (Rs)
1.
Panasonic LED TH43E200DX#45 580 (HSN code 85281211)
27,428/-
7349/- (Rs. 2945/- Central Excise Duty @ 12.5% on 65% of abated MRP of ₹ 36250/as per Annexure-7) + ₹ 4404/- VAT on discounted price ₹ 30,373/-)
34,777/-
27818/- (after discount)
7789/(28% GST)
35,607/-
Total Tax Pre-GST in (%)
26.79%
Total Tax Post-GST in (%)
28%
On scrutiny of invoices, DGAP observed that in the pre-GST era, the subject product attracted VAT @ 14.5% and Central Excise Duty @ 12.5% on 65% of abated MRP of the product, in terms of Notification No. 49/2008 Central Excise (N.T.) dated 24.12.2008. On implementation of the GST w.e.f. 01.07.2017, the GST rate on this product was fixed at 28%. It was reported by

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ing Committee on Anti-profiteering, Kerala and DGAP, New Delhi v. Peps Industries Pvt. Ltd., Trivandrum 2018 (12) TMI 1402 – NATIONAL ANTI-PROFITEERING AUTHORITY ;
(Date of Order 24.12.2018)
In this complaint, profiteering was alleged on the supply of Peps Spring Koil Bornell Normal Maroon 75x60x6" Mattress by not passing on the benefit of reduction in the rate of tax at the time of implementation of GST w.e.f 01.07.2017. Thus it was alleged that the supplier had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017. The following invoices for pre-GST and post-GST were considered and relied upon:
S.No.
Description of the product supplied
Pre GST rate
Post GST rate
Difference (in Rs.)
Invoice No.& Date
CST Rate
Central Excise Duty Rate
Price excluding Taxes
(in Rs.)
Invoice No. & Date
GST rate
Price excluding GST
(in Rs.)
1.
Peps Spring Koil Bornell Normal Maroon 75X60X6" Mattress (HSN 94042910)
2901 dated 30.06.201

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era as compared to the pre-GST era, the provisions of Section 171 of the CGST Act, 2017 were not contravened and hence the allegation of profiteering by the supplier was not established.
While adjudicating the complaint, the NAA observed that the only issue that need to be dwelled upon in as to whether there is a case of reduction in the rate of tax and whether the provision of section 171 of CGST Act, 2017 were attracted. It was held that it is clear from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017 and that the rate of tax on the said product has increased from 14.5% (2% CST + 12.5% Excise) to 28% and therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017.
The complaint was accordingly dismissed.
End Note
In all the above complaints adjudicated by the NAA, it has been found that there was no prima facie case established and that the complaints should n

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In Re : Udayan Cinema Pvt Ltd
GST
2019 (3) TMI 704 – AUTHORITY FOR ADVANCE RULING – WEST BENGAL – 2019 (23) G. S. T. L. 345 (A. A. R. – GST), [2019] 66 G S.T.R. 63 (AAR)
AUTHORITY FOR ADVANCE RULING – WEST BENGAL – AAR
Dated:- 26-2-2019
Case No. 44 of 2018 Order No. 45/WBAAR/2018-19
GST
Mr Sydney D'Silva, Joint Commissioner, CGST & CX (Member) and  Mr Parthasarathi Dey, Senior Joint Commissioner, SGST (Member)
Applicant's representative heard : Rahul Dhanuka, Advocate
Preamble
A person within the ambit of Section 100 (1) of the Central Goods and Services Act, 2017 or West Bengal Goods and Services Act, 2017 (hereinafter collectively called 'the GST Act'), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as menti

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, read with section 20(xviii) of the IGST Act, 2017.
1.3 The Applicant declares that the issues raised in the application are not pending nor decided in any proceedings under any provisions of the GST Act. The officer concerned from the revenue has raised no objection to the admissibility of the Application.
1.4 The Application is, therefore, admitted.
2. Submissions of the Applicant
2.1 The Applicant submits, along with the Application, a written submission, including a description of the activity of a Line Producer and the proposed draft for the contract with CDIVF (hereinafter the Contract). The Contract is for the 'production services'. According to clause 5 of the Contract, CDIVF will facilitate the provisioning of the production services. The Applicant will reimburse CDIVF the cost of procuring these services, based on the bills raised by the service providers, bearing the name of the feature film. CDIVF will hire the local actors in Brazil and will provide insurance coverage

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s the budgeted amount is shared by CDIVF in advance. In case of any deviation from the budgeted amount, CDIVF shall pay the foreign supplier after taking concurrence from the Applicant. Moreover, the invoices raised by the foreign suppliers mention the name of the motion picture.
2.4 Without prejudice to the aforesaid, the Applicant further argues that the service of CDIVF can also be classified as event management service, as described under section 13(5) of the IGST Act, 2017. The shooting of the film in foreign locations, resulting in the emergence of a CD containing the filmed materials, is an 'event' that CDIVF is going to organize and manage.
2.5 At the same time, the Applicant argues that CDIVF will act as pure agent, as defined under rule 33. The Contract specifically provides that the Applicant will reimburse CDIVF at the actual cost of procuring these services, based on the bills the service providers raise in the name of the feature film.
2.6 The Applicant also believes t

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ng the location of the supplier, the recipient receives the service in Brazil and location of the recipient is, therefore, not within the taxable territory, and no tax is payable on RCM in terms of Sl No. 1 of Notification No. 10/2017 – IGST (Rate) dated 28/06/2017.
3. Submissions of the Revenue
3.1 Concerned officer from the Revenue submits that at the time of signing the Contract the so-called principal suppliers of the services or the services are not clearly identified. The Question of facilitating as an intermediary between the principal suppliers and the recipient, therefore, does not arise. CDIVF is, not, therefore, acting as an intermediary.
4. Observation & Findings of the Authority
4.1. The answer to the question about the liability to pay IGST on the reverse charge on the payments to be made to CDIVF depends upon the location of the recipient of the service. The Applicant, a resident of India, will receive the service in Brazil, where it has no fixed establishments or a

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answered first before determining whether the Applicant is liable to pay IGST on the payments to be made to CDIVF in terms of Sl No. 1 of Notification No. 10/2017 – IGST (Rate) dated 28/06/2017, provided the transaction constitutes an inter-State supply within the meaning of section 7(4) of the IGST Act, 2017.
4.3 SAC 999900 refers to services provided by embassies and representations from other countries, services provided by international organizations such as the United Nations and its specialized agencies or regional bodies, etc., the Organization of American States, the European Union, the African Union, the League of Arab States, the Organization for Economic Cooperation and Development, the World Customs Organization, the Organization of Petroleum Exporting Countries and other international bodies or extraterritorial units (refer to Explanatory Notes on Classification of Services; cbic.gov.in). Service of CDIVF does not fit this description, and, therefore, cannot be classifie

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C 998596), as described in section 13(5) of the IGST Act, refers to “admission to, or organization of a cultural, artistic, sporting, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and services ancillary to such admission or organization”. Clearly, any event whatsoever does not fit the bill. It has to be an event of a nature specified above. The emergence of a CD containing footage for a motion picture is not a cultural, artistic, or entertainment or a similar event. It is merely a stage in the process of producing the feature film. Screening of the completed motion picture or, for that matter, of the footage contained in the CD, however, can fit the description of events included in section 13(5) of the IGST Act. CDIVF is not being contracted for organizing such a screening event for the Applicant. CDVIF is not, therefore, supplying services for organizing events included in section 13(5) of the IGST Act or the events described un

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has the Tribunal examined whether these commercial services are intermediary in nature. This judgment does not, therefore, throw much light on the question of classifying the service of a Line Producer and, therefore, not applicable in the present case.
4.7 It is evident from the above discussion that the Contract, the Applicant's argument based on the Contract, or the judgment in the case of Yash Raj Film (supra) does not throw sufficient light on the role CDIVF plays as a Line Producer in the production of the film in offshore locations. He is alternately described as an intermediary service provider or an event manager. It is, therefore, pertinent to examine the role of the Line Producer, as understood in common parlance in the film industry.
4.8 A Line Producer is a key member of the production team for a motion picture. Typically, a Line Producer manages the budget of a motion picture. Alternatively, or in addition, they may manage the day to day physical aspects of the film pr

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this schedule, the Line Producer can accurately estimate the cost of each day's shooting and produce a provisional budget estimating the total amount of funding required.
4.9 During pre-production, Line Producers, working closely with the director, production manager, first assistant director, art director and other heads of department, prepare the production schedule and budget and set the shoot date. Line Producers oversee all other preproduction activities, including hiring the production team, setting up the production office, location scouting, ensuring compliance with regulations and codes of practice, sourcing equipment and suppliers, selecting the crew, engaging supporting artists and contributors, and monitoring the progress of the art department and other production departments. Line Producers are ultimately responsible for overseeing all activities, and for ensuring that the production is completed on time and within budget. [Source: Media match – USA Media Industry mag

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al part of the activity for the production of the feature film.
4.11 The Applicant himself submits that CDIVF is going to organize and manage the shooting in Brazil that will result in the emergence of a CD containing the audio-visual content, and retains as security all production rights and talent buy-outs for such production in Brazil till receiving the final payment from the recipient. Clearly, CDVIF cannot retain production rights and talent buy-outs, even as security, unless it is engaged in the production and realization of a motion picture, explicitly or implicitly protected by copyright, without a contract for outright sale. It is, therefore, provisioning motion picture production service classifiable under SAC 999612. It is, therefore, not an intermediary service.
4.12 The service being supplied is not, therefore, classifiable as the one specified in subsections (3) to (13) of section 13 of the IGST Act, 2017. The transaction between CDIVF and the Applicant is, therefore, i

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ds any title to the goods or services or both so procured or supplied as a pure agent of the recipient of supply;
(c) does not use for his own interest such goods or services so procured; and
(d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account.
The Contract does not specify CDIVF as the Applicant's pure agent. It merely refers to bills for some of the services procured will bear the name of the feature film and will be paid on an actual cost basis. The crucial test is whether these services are a charge on the Applicant or CDIVF. If CDIVF is liable to pay the suppliers of these services no matter what the Applicant does, it will be treated as a charge on CDIVF. As CDIVF holds the production rights, even though as security, all procurements of goods and services will be a charge on him unless specifically excluded. That the bills for such services bears the name of the feature film

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Goa Goods and Services Tax (Amendment) Act, 2019.
7/5/2019-LA Dated:- 26-2-2019 Goa SGST
GST – States
Goa SGST
Goa SGST
GOVERNMENT OF GOA
Department of Law & Judiciary
Legal Affairs Division
Notification
7/5/2019-LA
The Goa Goods and Services Tax (Amendment) Act, 2019 (Goa Act 4 of 2019), which has been passed by the Legislative Assembly of Goa on 31-1-2019 and assented to by the Governor of Goa on 19-2-2019, is hereby published for the general information of the public.
Dnyaneshwar Raut Dessai, Joint Secretary (Law).
Porvorim, 26th February, 2019.
–
The Goa Goods and Services Tax (Amendment) Act, 2019
(Goa Act 4 of 2019) [19-2-2019]
AN ACT
to amend the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).
Be it enacted by the Legislative Assembly of Goa in the Seventieth Year of the Republic of India as follows:-
1. Short title and commencement.- (1) This Act may be called the Goa Goods and Services Tax (Amendment) Act, 2019.
(2) Save as otherwise pro

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g by way of totalisator or a license to bookmaker or activities of a licensed bookmaker in such club; and”;
(iv) clause (18) shall be omitted;
(v) in clause (35), for the expression “clause (c)”, the expression “clause (b)” shall be substituted;
(vi) in clause (69), in sub-clause (f), after the word and figures “article 371”, the expression “and article 371J” shall be inserted;
(vii) in clause (102), the following Explanation shall be inserted, namely:
“Explanation.- For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;”.
3. Amendment of section 7.- In section 7 of the principal Act, with effect from the 1st day of July, 2017,
(i) in sub-section (1),
(a) in clause (b), after the expression “or furtherance of business;”, the word “and” shall be inserted and shall always be deemed to have been inserted;
(b) in clause (c), the word “and” shall be omitted and shall always be deemed to have be

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erse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.”.
5. Amendment of section 10.- In section 10 of the principal Act,-
(i) in sub-section (1),-
(a) for the expression “in lieu of the tax payable by him, an amount calculated at such rate”, expression “in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate” shall be substituted;
(b) in the proviso, for the expression “one crore rupees, as may be recommended by the Council.”, the expression “one crore and fifty lakh rupees as may be recommended by the Council:” shall be substituted;
(c) after the proviso, the following proviso shall be inserted, namely:-
“Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than

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ds or, as the case may be, services-
(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person;”;
(ii) in clause (c), for the word and figures “section 41”, the words, figures and letter “section 41 or section 43A” shall be substituted.
9. Amendment of section 17.- In section 17 of the principal Act,-
(i) in sub-section (3), the following Explanation shall be inserted, namely:-
“Explanation.- For the purposes of this sub-section, the expression “value of exempt supply” shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.”;
(ii) in sub-section (5),

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respect of such services shall be available-
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged,-
(I) in the manufacture of such motor vehicles, vessels or aircrafts; or
(II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircrafts insured by him;
(b) the following supply of goods or services or both,-
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircrafts referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:
Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward

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te in respect of which the Central Government has enhanced the aggregate turnover referred to in the first proviso, he shall be liable to be registered if his aggregate turnover in a financial year exceeds the amount equivalent to such enhanced turnover.”;
(ii) in the Explanation, in clause (iii), after the word “Constitution”, the expression “except the State of Jammu and Kashmir and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand” shall be inserted.”.
12. Amendment of section 24.- In section 24 of the principal Act, in clause (x), after the words “commerce operator”, the words and figures “who is required to collect tax at source under section 52” shall be inserted.
13. Amendment of section 25.- In section 25 of the principal Act,
(i) in sub-section (1), after the proviso and before the Explanation, the following proviso shall be inserted, namely:-
“Provided further that a person having a unit, as defined in the Special Economic Zones Act,

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prescribed.”;
(iii) in sub-section (2), after the proviso, the following proviso shall be inserted, namely:-
“Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.”.
15. Amendment of section 34.- In section 34 of the principal Act,-
(i) in sub-section (1),-
(a) for the words “Where a tax invoice has”, the words “Where one or more tax invoices have” shall be substituted;
(b) for the words “a credit note”, the words “one or more credit notes for supplies made in a financial year” shall be substituted;
(ii) in sub-section (3),-
(a) for the words “Where a tax invoice has”, the words “Where one or more tax invoices have” shall be substituted;
(b) for the words “a debit note”, the words “one or more debit notes for supplies made in a financial year” shall be substituted.
16. Amendment of section 35.- In section 35 of the principal Ac

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ho shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.”;
(ii) in sub-section (7), the following proviso shall be inserted, namely:-
“Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein.”;
(iii) in sub-section (9),-
(a) for the words “in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed”, the words “in such form and manner as may be prescribed” shall be substituted;
(b) in the proviso, for the words “the end of the financial year”, the words “the end of the financial year to which such details pertain” shall be substituted.
18. Insertion of new section 43A.-

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such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty percent of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.
(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thou

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x shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”;
(b) in clause (d), the following proviso shall be inserted, namely:-
“Provided that the input tax credit on account of Union territory tax shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”.
21. Insertion of new sections 49A and 49B.- After section 49 of the principal Act, the following sections shall be inserted, namely:-
“49A. Utilisation of input tax credit subject to certain conditions.- Notwithstanding anything contained in section 49, the input tax credit on account of State tax shall be utilized towards payment of integrated tax or State tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such paymen

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ause (c), in item (i), after the words “foreign exchange”, the words “or in Indian rupees wherever permitted by the Reserve Bank of India” shall be inserted;
(b) for sub-clause (e), the following sub-clause shall be substituted, namely:-
“(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;”.
24. Amendment of section 79.- In section 79 of the principal Act, after sub-section (4), the following Explanation shall be inserted, namely:-
“Explanation.- For the purposes of this section, the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.”.
25. Amendment of section 107.- In section 107 of the principal Act, in sub-section (6), in clause (b), after the expression “arising from the said order,”, the expression “subject to a maximum of t

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shall be substituted.
30. Amendment of Schedule I.- In Schedule I of the principal Act, in paragraph 4, the word “taxable” shall be omitted.
31. Amendment of Schedule II.- In Schedule II of the principal Act, in the heading, after the word “ACTIVITIES”, the words “OR TRANSACTIONS” shall be inserted and shall be deemed to have been inserted with effect from the 1st day of July, 2017.
32. Amendment of Schedule III.- In Schedule III of the principal Act,-
(i) after paragraph 6, the following paragraphs shall be inserted, namely:-
“7. Supply of goods from a place outside India to another place outside India without such goods entering into India.
8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.”;
(ii) the existing

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M/s. COCHIN SANITARY STORES Versus ASSISTANT COMMISSIONER, STATE GOODS AND SERVICES TAX, ALUVA, INSPECTING ASSISTANT COMMISSIONERE, STATE GOODS AND SERVICES TAX, MATTANCHERY AND STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, STATE GOODS AND SERVICES TAX DEPARTMENT, THIRUVANANTHAPURAM
VAT and Sales Tax
2019 (3) TMI 546 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 26-2-2019
WP(C). No. 3978 of 2019
CST, VAT & Sales Tax
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADV. SRI. VIJAYAN. K. U.
For The Respondent : GP DR/ THUSHARA JAMES
JUDGMENT
The petitioner trades in water and sanitary equipment, allegedly made of brass; that is, articles of brass. Claiming so, the petitioner has sought the arti

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d not be efficacious, he has nevertheless insisted that the assessing authority has rendered Ext.P8 on an erroneous reading of not only facts, but also law. According to him, he has even ignored a binding judgment of this Court, that is Ext.P5.
5. To elaborate, the learned counsel submits that the goods the petitioner trades in come under HSN 7419.99.30 and they attract only 5 per cent tax. In fact, in 2006, through Ext.P3, the then Commissioner clarified this issue. But later, when the successor officer tried to trifle through the Ext.P4 with that clarification, this Court in Ext.P5 judgment has upheld the Ext.P3. According to the learned counsel, under these circumstances, the respondent authorities ought not have restored the department

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Mehul Kheria Versus Commissioner, CGST & Central Excise, Indore
GST
2019 (3) TMI 486 – MADHYA PRADESH HIGH COURT – TMI
MADHYA PRADESH HIGH COURT – HC
Dated:- 26-2-2019
M. Cr. C. No. 7932/2019
GST
Vivek Rusia J.
For the Petitioner : Shri Vivek Dalal, learned counsel
For the Respondent : Shri Prasanna Prasad, learned counsel
ORDER
This is a first application under Section 439 Cr.P.C. by petitioner- Mehul Kheria, who has been arrested by the respondent on 10.1.2019 during investigation in Cr. Case registered as Crime No.43/2018 by Commissioner, CGST & Central Excise, Indore for the offence punishable under Section 132 (1) (a), (b) and (c) of Goods & Services Tax Act, 2017 (hereinafter, for short, “GST Act”).
2. Heard the learned counsel for the parties and perused the case diary.
3. As per prosecution/respondent story, Commissioner and Additional Commissioner noticed huge tax evasion and fraud in respect of payment of GST in the entire country. They apprised t

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ected him to obtain such type of GST Registration number and offered Rs. 1.00 Lakh for registration. As per his own admission, the petitioner has obtain registration certificate of as many as 59 fake firms. Present petitioner along with Jagdish Kanani created many bogus and fake firms and issued fake invoices to get the input tax-credit through these invoices and defrauded the Govt. Exchequer and as a result of the investigation till date it is found that in total, these firms received fake invoices of Rs. 9,217.14 Lakhs for inward supply and issued fake invoices of Rs. 9,799.09 Lakhs for outward supplies. Accordingly, Jagdish Kanani and his partner defrauded Govt. Exchequer and evaded the GST to the tune of Rs. 3,422.02 Lakhs i.e. @ 18% of total supply Rs. 19,016.23 Lakhs by creating such bogus firms.
In the course of investigation, said Jagdish Kanani appeared at CGST & Central Excise Head Quarter on 4.1.2019 and his statements were recorded u/s. 70 of the GST Act. He was confronted

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r under the GST Act. He has not rendered any services nor issued any invoice, therefore, he has wrongly been made accused u/s. 132 of the GST Act. His statement has already been recorded and his custody is not required for further investigation and he will cooperate in further investigation, if any, and is ready to appear before the respondent/prosecution as and when his presence is required. The investigation may take long time to conclude, hence he deserves to be released on bail.
6. On the other hand, Shri Prasanna Prasad, learned counsel appearing for the respondent/prosecution, opposes the bail application. He has produced the statement of the petitioner and other witnesses. He submits that the statement recorded by the petitioner is admissible in evidence and which can be used against him in the trial as held by this Court in the case of M/s. R.S. Company V/s. Commissioner of Central Excise (CEA No.24/2012) decided on 8.2.2017. The main accused have not been arrested so far, hen

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