Goods and Services Tax

GST REFUND – INVERTED DUTY STRUCTURE.
Query (Issue) Started By: – SAFETAB LIFESCIENCE Dated:- 20-12-2018 Last Reply Date:- 5-1-2019 Goods and Services Tax – GST
Got 1 Reply
GST
Dear Experts,
We are eligible for applying refund of ITC accumulated in Credit Ledger. What is the current proceedure. We will submit RFD-01A by online and RFD-01 manually with required documents such as Form 1-A, Credit Ledger copy, filed returns copy etc. physically. We know the calculations of elegible re

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Annual Membership and Registration Fees to Corpus Fund Subject to GST, Not Covered by Mutuality Principle.
Case-Laws
GST
Levy of GST – supply of services or not – contribution made by Members

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Transferring capital goods like machines and moulds between job-workers is a “supply” under GST, Section 141, CGST Act.
Case-Laws
GST
Supply or not – Transitional provisions – Section 141 of the CGST Act, 2017 – The transfer of machines & moulds (being capital goods), from the premises of the job-worker to another job-worker, which were originally received by said job-worker under the erstwhile Central Excise Act, 1944 will constitute as “supply” under GST.
TMI Updates – Highlig

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EA-2000service tax audit under GST Regime
Query (Issue) Started By: – Vishal Shekhar Dated:- 20-12-2018 Last Reply Date:- 18-1-2019 Service Tax
Got 8 Replies
Service Tax
Is service tax audit under EA-2000 in GST regime is possible, what does the savings clause in GST mentions about it? Will the service tax be covered in the GST audits beginning April 2019?
Reply By KASTURI SETHI:
The Reply:
Dear Querist,
Query-wise reply is as under:-
(i) Yes. 100%.
(ii) Section 174 of CGST Act, 2017 (Appended below)
(iii) Yes.
Saving Section is for all purposes in order to safeguard revenue. On 12.10.18, Gauhati High Court has held in favour of the department on this issue in the case of M/s. Mascote Entrade Pvt. Ltd. Vs.UOI & two othe

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2018 passed by the Supreme Court, in which, the reference to the said order of this Court is made and the proceedings before the High Court have stayed. After analyzing Section 173 of the CGST Act, Justice Akil Kureshi and Justice B N Karia noted that “clause of Subsection (2) of Section 174 and other clauses would, prima facie, show that there was no saving of Rule 5A in such manner that fresh proceedings for audit could be initiated in exercise of powers under the said Rule. We, therefore, have serious doubts whether, with the aid of Rule 5A of the Service Tax Rules, 1994, the CAG can carry out compulsory Service Tax audit of private agencies like the petitioner.” “Under the circumstances, issue Notice, returnable on 28.11.2018. By way of

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ed in Service Tax
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
If the threshold limit exceeds register with GST now. However you have to face the consequences for non registration, non levying of tax etc
Reply By KASTURI SETHI:
The Reply:
Rightly advised by Sh.Govindarajan Sir. I further add that if any rule is set aside by any court the department does not sit idle. The department fights such cases up to Supreme Court. Meanwhile, all assessees comply with in routine manner till the final decision of the Supreme Court. Latest news is that Delhi High Court has fixed date on this very issue.. Litigation will go on. Govt work will not suffer. Neither any court wants that Govt work should suffer.
Reply By KASTURI SETHI:
The Reply:
Deci

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In Re: Biostadt India Limited
GST
2019 (3) TMI 540 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (22) G. S. T. L. 551 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 20-12-2018
GST-ARA- 72/2018-19/B-165
GST
SHRI B. TIMOTHY, AND SHRI B. V. BORHADE, MEMBER
PROCEEDINGS
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by BIOSTADT INDIA LIMITED, the applicant, seeking an advance ruling in respect of the following questions.
1.1. The question or issue before Your Honor for determination is whether Input Tax Credit (“ITC”) can be claimed by the applicant on procurement of Gold coins which are to be distributed to the customers at the end of scheme period for

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G IS SOUGHT
1. This Application is being filed by M/s. Biostadt India Limited ('the Applicant'/the Company'). The Applicant, having Good and Service Tax (GST) Registration No. 27AACCB1830G123 is inter alia engaged in the business of developing, manufacturing and distributing crop protection chemicals and hybrid seeds.
2. Biostadt India Limited has been serving the farming community for over three decades. The company provides a helping hand to the farmers by providing them with top-of-the-Iine agricultural inputs and services.
3. Over a period of time, the applicant has diversified into a range of seaweed-based biotechnological inputs using fermentation technology, under the well-known brand 'Biozyme'. They also deal in crop protection chemicals – insecticides and pesticides and has made its foray in hybrid seeds market.
4. The manufacturing facilities of the applicant are multi-locational and are very well-equipped with state-of-the-art technology and testing equipment which produ

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al Excise law, Service tax legislation and respective State Value Added Tax laws and now is registered under Good and Service Tax (GST).
8. This Application is being filed by M/s. Biostadt India Limited which inter-alia has launched a new sales promotion scheme namely the “Kharif Gold Scheme 2018” for their customers. The said sales promotion scheme helps the company in achieving their sales and collection targets.
9. The terms and conditions of the scheme are as under:
a. The said scheme will be in force for the period June 2018 to August 2018.
b. The scheme is divided into two parts:
Lifting of products:
Customers who purchase the below mentioned products on or above their below mentioned quantity shall be entitled to one 10 grams Gold coin. The products that need to be lifted during the scheme are as under:
Products
Qty.(kgs/Itrs)
Biozyme Liquid
250
Biozyme Granules
1000
Amaze-X
200
Rejoice
30
Roko
50
Biomycin
50
Maiden
20
Collections:
If the customers after

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e procuring gold coins from jewelers which are to be distributed at the end of the scheme. As per notification 1/2018 – CGST (Rate) dtd. 28.06.2017, gold is leviable to GST at the rate of 3 percent.
11. The applicant intends to maximize their sales and minimize their outstanding collection through the operation of “Kharif Gold Scheme 2018”.
Statement of relevant facts having a bearing on the question(s) raised.
1. ISSUE FOR DETERMINATION
1.1. The question or issue before Your Honor for determination is whether Input Tax Credit (“ITC”) can be claimed by the applicant on procurement of Gold coins which are to be distributed to the customers at the end of scheme period for achieving the stipulated lifting or payment criteria?
1.2 The question or issue before Your Honor is not restricted to the said scheme only. The applicant notifies schemes with similar conditions periodically. So whether the ITC can be claimed in all such similar schemes.
STATEMENT CONTAINING THE APPLICANT'S INTER

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tion 25 of the CGST Act.
As stated earlier, the applicant is registered under the GST law.
Input Tax:
Input tax as defined under section 2(62) of the CGST Act includes CGST, respective SGST and UTGST, IGST and so on.
Section 2(63) of the CGST Act defines Input tax credit as the credit of input tax.
Inputs is defined under Section 2(59) of the CGST Act to mean any goods other than capital goods which are used or intended to be used by a supplier in course or furtherance of business.
Gold coins are inputs for the applicant and GST levied on such purchase qualifies to be an input tax for the purpose of Section 16(1) read with Section 2(62) of the CGST Act.
In course or furtherance of business:
The notable requirement under Section 16(1) of the CGST Act is that the credit of input tax claimed on a supply of goods or services should be used in course or furtherance of the business. While the term business is defined under CGST act, the phrase “in course or furtherance of business” i

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ces or both. These conditions are with respect to possession of tax invoice, receipt of goods, payment of tax and filing of returns.
The applicant contends that he has satisfied the conditions as laid down in Section 16(2) and is eligible to claim ITC on purchase of gold coins.
2.5. In accordance with the above paras, applicant strongly feels that he is eligible to claim ITC on procurement of gold coins as the requirements of Section 16(1) and 16(2) have been fulfilled. The only criteria that's need to be evaluated is the restrictions laid down in Section 17 which provides for apportionment of credits and blocked credits.
2.6. Section 17(5) of the CGST Act provides for blocked credits. Section 17(5) contains a non-obstante clause with respect to Section 16(1) of the CGST Act. Hence if any of the clause under Section 17(5) is satisfied then ITC shall be specifically disallowed even if it was eligible at the first stage i.e. under Section 16(1).
2.7. The applicant reproduces the rele

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he Gift-Tax Act (18 of 1858) had defined the word gift to mean transfer by one person to another of any existing movable or immovable property voluntarily and without consideration in money or money's worth.
The Honorable Supreme Court cited the definition of 'gift' from Corpus Juris Secundum, Volume 38 in the case of Sonia Bhatia v. State of UP [1981 SCR (3) 239,1981 SCC (2) 585) = 1981 (3) TMI 250 – SUPREME COURT as follows:
“A 'gift' is commonly defined as a voluntary transfer of property by one to another, without any consideration or compensation therefor. A 'gift' is a gratuity and an act of generosity and does not require a consideration, but there can be none; if there is a consideration for the transaction, it is not a gift.
2.10. On the basis of above jurisprudence, one can reasonable conclude that gift is a gratuity and does not require any consideration. If a consideration is attached to a transaction, then it cannot be termed as a gift. Emotional consideration such as l

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sfies the criteria laid under the scheme. Giving away gold coins to customer cannot be termed as “voluntary” act of the applicant.
2.12. The applicant strongly contends that the gold coins distributed to customers at the end of scheme period cannot be qualified as “gift”. Since they cannot be qualified as gift, disallowance under Section 17(5) will not be attracted. Hence, the applicant should be entitled to claim ITC of gold coins purchased for effective implementation of the scheme.
3. PRAYER
In light of the above, a Ruling is sought from the Honorable Authority on eligibility of ITC on procurement of gold coins for distribution to customers under the sales promotion scheme.
Kharif Gold Scheme 2018
Scheme Period: June to Aug 2018
Scheme Benefit
Products
Qty.(kgs/ltrs)
 
Biozyme Liquid
250
Biozyme Granules
1000
10 GM Gold Coin for lifting Products
Amaze-X
200
Rejoice
30
Roko
50
Biomycin
50
Maiden
20
Collections:
 
Month
Collection Amount (Rs.)
8

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upplier in the course or furtherance of business.
2. Input Tax [Section 2(62)1:
“Input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes
(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or
(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy;
3. Input Tax Credit (Section 2(63)1:
“Input tax credit” means the credit of input tax
4. Registe

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ther tax paying documents as may be prescribed;
(b) he has received the goods or services or both.
Explanation. For the purposes of this clause, it shall be deemed that the registered person has received the goods 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;
(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and
(d) he has furnished the return under section 39:
7. Blocked credits (Section 17(5):
Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:
(a) motor

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law for the time being in force; or
(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or home travel concession;
(C) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;
(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.
Explanation.- For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, t

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isions under the Gift Tax Act, 1958:
1. Gift (Section 2(xii):
“Gift” means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section;
[Explanation.-A transfer of any building or part thereof referred to in clause (iii), clause (iiia) or clause (iiib) of section 27 of the Income tax Act, by the person who is deemed under the said clause to be the owner thereof made voluntarily and without consideration in money or money's worth, shall be deemed to be a gift made by such person;]
Additional submissions dated 19.11.2018
We reiterate our submissions dated 23.08.2018, 10.09.2018 & in the course of preliminary hearing wherein we have sought ruling on admissibility of input tax credit of tax paid on purchase of gold coins for our sales scheme.
Without rejudice to written su

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nother of any existing movable or immovable property voluntarily and without consideration in money or money's worth.
Honorable Supreme Court cited the definition of 'gift' in the case of Sonia Bhatia v. State of UP [1981 SCR (3) 239, 1981 SCC (2) 585] = 1981 (3) TMI 250 – SUPREME COURT as a voluntary transfer of property by one to another, without any consideration or compensation therefor. A gift' is a gratuity and an act of generosity and does not require a consideration, but there can be none; if there is a consideration for the transaction, it is not a gift.
It is a settled principle that “Gift cannot arise out of a contractual obligation” and “nothing comes free in business”.
The Australian High Court in the case of commissioner of Taxation (Cth) v. McPhail [1968] 41 ALUR 346 held that to constitute a 'gift' the property should be transferred voluntarily and not as a result of a contractual obligation. The copy of said judgement is enclosed at Annexure “B”. – Please refer t

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are not related and price is the sole consideration for the supply.
Related persons is defined in explanation to section 15 of CGST AGNES
Our customers do not fall under any of the said criteria of related person
Price of all the products are pre-defined and customers are obliged to pay that price for purchase of products.
Price is the sole consideration received from the customers for sales made by us.
Section 15(1) criteria is satisfied in our case and hence value of supply of goods should include only the price that is payable by the customer. Value of gold coins cannot be clubbed with value of supply made by us.
Moreover, cost of gold coin to be distributed at the end of scheme is factored in sales price charged by us. As a result, we are indirectly discharging GST liability on gold coin supplied by us.
Further none of the conditions mentioned U/s 15(2) are satisfied to include the value of gold coin in the value of supply.
We would further submit that when a 'comme

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er.
03. CONTENTION – AS PER THE CONCERNED OFFICER
The submission, as reproduced verbatim, could be seen thus-
It is submitted that, Issue on which advance ruling is required:
Reference Application No:72 Dated 23.08.2018
I. Comments on Annexure-1 of Submission
1. Annexure I contains 'Statement of Relevant Facts Having a Bearing on the Questions on which the Advance Ruling is sought. This office offers no comments.
II. Comments on Annexure-II of Submission
1. Annexure II contains 'Issues for Determination'. This office offers no comments.
III. Comments on Annexure-Ill of Submission
Para 2.1: No comments,
Para 2.2: No comments.
Para 2.3 & Para 2.4 :
1. This office contends that the 'Gold coins' to be distributed to customers of M/s Biostadt India Limited at the end of the kharif Gold Scheme described in Annexure I of their submission are NOT INPUTS and hence, GST paid on such a purchase does not qualify to be an input tax for the purpose of Section 16(1) read with Section 2(6

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, based on its facts, on the touchstone of the definition of inputs'.
5. In the course or furtherance' is not defined, but is broad enough to cover any supplies made in connection with the business. It is important to note that only supplies received by a taxable person that are used/ consumed in the course or furtherance of business are eligible for claiming input tax credit. This impacts the eligibility to claim input tax: credit. Hence, it becomes important for an entity to justify that a particular act is done in the course and furtherance of its business goals and intentions.
6. We can determine whether a activity is undertaken in the course or furtherance of business on the basis of few principles:
a. Was the activity undertaken in line with the basic business model?
b. Is the activity needed for continuity in the supply?
c. Is the activity' mainly concerned with the making taxable supply for consideration?
7. Therefore, if some supply is either used exclusively in the cour

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consideration unless we look as this distribution as a hidden discount'.
9. The conditions, laid down in Section 16(2) of the Act have been satisfied but not the basic requirement as per Section 16(1) of the Act. Hence, the contention of the Applicant is not acceptable.
Para 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 and 2.12:
1. Clause (b) of Section 17(5) of CGST Act 2017 stipulates that the input tax credit with respect to the “goods” disposed of by way of gift shall not be allowed. Or in other words, it is stipulated that no ITC on any goods can be availed, if they are given as gifts, whether or not in course of furtherance business.
2. ITC on goods given away or disposed as “gifts” should not be available when no tax is being paid on their disposal. The logic of satisfying Section 16 is of no avail to earn this credit lawfully, because Section 17(5) itself starts with a non obstante clause, which means even if Section 16 allows, Section 17(5) shall block. Moreover, Section 17 (5) is

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efits or exchange consideration in kind (in lieu of cash) in the garb of gifts to avoid valuation and thus avoid levy of tax, In the instant case, the Gold Coins are gifts/ free supplies in course of business. If consideration for these goods is not charged directly; they shall qualify as “gifts” and ITC shall not be eligible.
4. If these 'gold coins' are not treated as gifts, another argument can be considered then as 'discount'/ 'hidden discount and the said discount satisfies the conditions under Section 15(3), i.e. the discount (whether in full or in part) arises and is recorded as a contractual obligation under specific invoice(s), TC shall be available on such goods. It may be worthwhile to show such goods under the respective invoice/credit note after establishing on record, the agreement under which it arises. As soon as an obligation is attached, the commodity loses its identity as a “gift” and no denial of ITC can arise under Section 17(5) in such case:
5. If it is so opine

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s applicable to their case. The facts of the case were totally different and also the said judgment was delivered under a different legislation and therefore, the same cannot be made applicable to the facts of this case which is being adjudicated under GST ACT. In the case of KONE ELEVATOR INDIA PVT LTD VS. STATE OF TAMIL NADU as reported in (2014(304) ELT 161. (SC) = 2014 (5) TMI 265 – SUPREME COURT it has been held that, it should be strict and literal, what is applicable in one taxing statute may not be applied to another taxing statute (Per: F.M. Ibrahim Kalifulla.] (Para-84). Hence, the case law. cited by the applicant in this respect is not acceptable.
8. In case the Advance Ruling Authority' accepts the contention of the applicant and allows the availment of ITC on gold coins, then the accounting of the stock and disbursement of gold coins should be required to be maintained.
Para : in the light of the above discussion, we pray that the Honorable Advance Ruling Authority may p

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e written submissions.
05. OBSERVATIONS
We have gone through the facts of the case. The issue put before us is in respect of a future transaction which would be on the lines thus –
The applicant is engaged in the business of developing, manufacturing and distributing crop protection chemicals and hybrid seeds and in order to achieve sales and marketing objectives, they have launched various target based – sales incentive schemes for their distributors and retailers (customers) to achieve a specified target and in turn helps the company to achieve their targets. The subject application is in respect of a sales promotion scheme known as “Kharif Gold Scheme 2018”, which has been floated by them for their customers and is of two types. In the first case, their Customers who purchased certain products on or above a certain quantity would be entitled to one 10 grams Gold coin. In the second scenario, their customers who, after lifting the products from the applicant, made certain minimum

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n of gold coins is not in line with the basic business model, the gold coins are not essential for continuity in supply and the distribution of gold coins are not concerned with the making of taxable supply for consideration unless the distribution is looked as a hidden discount.
We find that the applicant has floated the subject scheme for the period June, 2018 to August, 2018 only, by way of which gold coins of different denominations would be given to those customers who lifted a certain quantity of products or made a certain amount of payment. Thus it is seen that it is only those specific customers who fulfill the conditions would be able to avail the benefit of the subject scheme. The applicant has submitted that the said Gold coins are inputs for them and GST levied on such purchase qualifies to be an input tax for the purpose of Section 16(1) read with Section 2(62) of the CGST Act.
We find that the provisions of ITC are governed by Sections 16 and 17 of the CGST Act, 2017. I

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ift or not. The word 'gift' has not been defined in the CGST Act and the Gift-Tax Act (18 of 1858) had defined the word gift to mean transfer by one person to another of any existing movable or immovable property voluntarily and without consideration in money or money's worth. It is seen from the definition that the transfer i.e the gift given in such a case has to be voluntary. The applicant has submitted that they have a contractual arrangement with the customer wherein if he purchases certain amount of company's product or makes payment in a prescribed manner then he shall be entitled to a gold coin of specific weight. A contractual arrangement implies especially in view of the magnitude and area of the applicant's business that, it should also be agreed by the customer in writing to such scheme floated by the applicant. We find that they have not submitted any such contract/agreement and in support of their contention, as Exhibit 'A' they have only submitted a brochure/writeup/invi

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s case gold coins, will be given to customers who satisfy certain conditions is nothing but assurance of giving away gifts on those conditions being achieved by the customers. Under the GST laws the intention for non-granting/denial of setoff is envisaged in situations where there is no tax on output supply. In cases where the goods are procured with levy of input tax and are supplied without tax being paid on such output supplies, the scheme of the GST Act provides no input tax credit, except export.
Schedule I to the CGST Act, 2017 deals with activities to be treated as supply even if made without consideration. As per Entry Number 2 to Schedule I (2), Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:
Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services

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excluded from the scope of being a supply, then the provisions of the Valuation Rules come into play. Thus in such cases it can safely be assumed that the purchase value and output supply value of the 'gift' shall be the same and therefore the ITC would be the same as the output GST payable. In other words if the giverof the gift does not pay output tax on the same then the compensation to the department would be the foregoing of the ITC on such gifts.
In the instant case it is seen that the applicant has assigned a value to the gold coins to be given gifts and the value is Rs. 3,200/- per gm. They have not explained as to how they have arrived at the value because value of gold changes everyday. Secondly the Scheme announced by them states that “customers who lifted the products as per the scheme and made payments as per the scheme are invited for the meeting.”
We now deal with one of the contention of the applicant that they have a contractual arrangement with the customer wherein

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t 2017 does not mean that they are entitled to credit since Section 17(5) starts with “Notwithstanding anything contained in sub-section (1) of Section 16 ………” The implication is that in the subject case even if it seems, as per the applicant, that Section 16 (1) is applicable in their case and allows them credit, Section 17(5) shall block such credits.
In view of all above deliberations, the questions can be answered thus –
05. In view of the extensive deliberations as held hereinabove, we pass an order as follows :
ORDER
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
NO.GST-ARA- 72/2018-19/B-165
Mumbai, dt. 20.12.2018
For reasons as discussed in the body of the order, the questions are answered thus –
Question :- The question or issue before Your Honor for determination is whether Input Tax Credit (“ITC”) can be claimed by the applicant on procurement of Gold coins which are to be distributed to t

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CGST, C.E. & C.C., Bhopal Versus Akansha Sales Promoters I Pvt Ltd
Service Tax
2019 (1) TMI 974 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 20-12-2018
Service Tax Appeal No. ST/60538/2013 [DB] – IO/ST/101/2018-CU[DB]
Service Tax
MR. C.L. MAHAR, MEMBER (TECHNICAL) And MRS. RACHNA GUPTA, MEMBER (JUDICIAL)
Present for the Appellant: Mr. G.R. Singh, DR
Present for the Respondent: Mr. JM Sharma, Consultant & Ms. Pooja Agarwal, CA
ORDER
PER: RACHNA GUPTA
This matter has been taken up in furtherance of the Order of Hon'ble High Court Madhya Pradesh dated 29.10.2018. The adjudication in this case began with a SCN of 20.04.2010. The proposed demand therein was confirmed however the penalty proposed therein wa

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to the absence of the respondent-assessee and the circumstances as detailed and the order dated 12.12.2017 that the Miscellaneous Application of the respondent assessee was dismissed and the Appeal of Revenue was listed for final hearing on 12.01.2018.
3. This Tribunal vide the Order dated 02.07.2018 has allowed the impugned Appeal of the Revenue vide the Final Order No. 52378/2018 dated 02.07.2018 holding :
“6. From the record of the case, we find that the demand stands raised for the period 01.10.2004 to 31.03.2010. The amendment in Section 78 was carried out w.e.f. 10.05.2008. hence, in the light of the Tribunal decision above, penalty under Section 76 is imposable for the period 01.10.2004 to 09.05.2008. The lower authority is directe

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ledge of the disposal of the main Appeal vide Order dated 02.07.2018 as such:
“After going through the order sheet and the proceedings recorded by the Tribunal on 22.11.2017, we are satisfied that the order passed by the Tribunal on 12.12.2017 is contrary to the facts available on record. The Tribunal failed to see that the appellant was directed to furnish the details or the chronological events on 22.11.2017 and the case was posted on 12.12.2017. On the said date request was made for an adjournment on the ground of illness of the counsel of the appellant. Heavens would not have fallen if the case was adjourned for a week or so to enable the appellant to put forth his case before the Tribunal.
In view of the foregoing we cannot sustain

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M/s. Bright Road Logistics Pvt. Ltd. Versus The Commercial Tax Officer (ENF-21)
GST
2019 (1) TMI 678 – KARNATAKA HIGH COURT – 2019 (21) G. S. T. L. 150 (Kar.) , [2019] 66 G S.T.R. 235 (Kar)
KARNATAKA HIGH COURT – HC
Dated:- 20-12-2018
Writ Petition No. 47450 of 2018(T-RES)
GST
Mr. Justice G. Narendar
For the Petitioner : Smt. Veena J. Kamath, Advocate
For the Respondent :  Sri. Vikram Huilgol, HCGP
ORDER
Heard the learned counsel for the petitioner and Sri. Vikram Huilgol, learned HCGP for respondent.
2. The petitioner is before this Court calling in question the detention order dated 10.08.2018 (Annexure-A) issued under Section 129(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act' for short), the order of confiscation of goods and conveyance and demand of tax, fine and penalty dated 19.09.2018 (Annexure-A2) issued under Section 130 of the CGST Act and the rectification order dated 25.09.2018 (Annexure-A3) issu

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an attempt to avoid paying tax to the Government and same is liable to be levied as mandated under Section 129(1) of the CGST Act.
4. Learned counsel for the petitioner contends that the order stands vitiated on the sole ground that there is non-compliance of the mandate under the provisions of Section 129(4) of the Act and hence the same warrant interference at the hands of this Court.
5. It is contended that the order of detention under Section 129(1) of the CGST Act vide Annexure-A, the order of confiscation vide Annexure-A2 and rectification order vide Annexure-A3 to the writ petition have been passed without affording an opportunity of hearing to the petitioner. It is further contended that the objections put forth by the petitioner had not been taken into consideration while passing the orders, which are impugned herein. The arguments put forth are required to be rejected for the following reasons:
1) The petitioner is a transporter; and
2) The detention and seizure order h

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Hobli, Bengaluru Urban, Karnataka, pin-560098. GSTIN 29CKOPP0258F3ZR for the goods covered by the LR No.707, 801, 791, 769, 793, 790, 792, 796, 2733, 798, 794, 810, 797, 783, 768 and 800 total 16 LRs covering 24 Bundles of goods along with original photocopies of the connected LRs and cash bills. The contents of the letter are reproduced.”
7. From a plain reading of the order, it is apparent that the contention raised by the learned counsel for the petitioner, that no opportunity has been afforded under Section 129 (4) of the CGST Act stands falsified.
That apart, the petitioner has also placed reliance on the document marked as Annexure-H, which is allegedly addressed to the Commercial Tax Officer and by the said letter, the petitioner states as under:
“Kindly take this confirmation letter on record and pass the order under Section 129(1)(a) of the Act. The consignee will agree to pay the tax and penalty. Do the needful and oblige.”
8. From the above, it is apparent that the all

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y the same hand. These are factual aspects that has to be gone into and adjudicated by the fact finding authority. This Court does not find any good ground warranting interference with the impugned orders by exercising its jurisdiction under Article 226 of the Constitution of India.
11. The petitioner has placed reliance on the ruling of the Division Bench of the Kerala High Court reported in 2018 SCC Online Ker 2696 in the case of The Assistant State Tax Officer Vs. M/s. Indus Towers Limited, with particular reference to the observations made by the Court at Paragraph Nos. 26and 27, wherein the Division Bench at para 27 after taking note of the fact of declaration having been made even prior to the commencement of transport found it necessary to order for release of goods.
12. In the instant case, no declaration has been made by the consignees either prior to the commencement of transport or even after the goods have been seized. Hence, the case put forth by the petitioner does not

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M/s. S.S. Construction Versus CGST, Mumbai West
Service Tax
2019 (1) TMI 509 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 20-12-2018
Appeal No. ST/86629/2018 – A/88157/2018
Service Tax
Dr. Suvendu Kumar Pati, Member (Judicial)
Ms. Kranti Rathi, Advocate with Shri J.R. Gawde, Consultant for the appellant
Shri Dilip Shinde, AC (AR) for the respondent
ORDER
Imposition of penalty under Section 78 of the Finance Act, 1994 against non-payment of service tax collected for providing telecom services and work contract services by the adjudicating authority which has attained finality in the order of the Commissioner (Appeals) is assailed by the appellant company before this forum.
2. Brief fact of the appellant's case is that it has been providing works contract services and telecommunication services since 03.11.2006. It has provided services like laying of cables and dock lines for telecommunication companies namely Tata Telecommunications, BSNL etc. as its ma

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promptly to the government after its collection. Reply of appellant was filed before the adjudicating authority who confirmed the duty liability interest and penalty invoking the extended period and after unsuccessfully challenging the same before the Commissioner (Appeals), the appellant has filed this appeal in the Tribunal.
3. In the memo of appeal and during course of hearing of the appeal, ld. Counsel for the appellant Ms. Kranti Rathi submitted that appellant was not extended the benefit provided under Section 73(3) of the Finance Act, 1994 after payment of duty, interest and penalty component accordingly and was put to show-cause almost two years after the visit of the departmental officials. In citing judicial decisions in Ford India Pvt. Ltd. vide Final order no. 40182- 40183/2018 dated 23.01.2018, CCE vs. Mahindra & Mahindra Ltd. 2018-TIOL-187-SC-MUM-CX, Thirumurugan Enterprises 2015 (14) STR 681 (Mad.), A.N. Impex 2016 (42) STR 793 (Bom), Amway India Enterprises Pvt. Ltd.

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reference to case laws reported in CCE vs. Neminath Fabrics Pvt. Ltd. 2010 (256) ELT 369 (Guj) that as department acquired knowledge of irregularity, fact of suppression cannot be obliterated. He strenuously argued that unless anti-evasion team had not raided the premises of the appellant, the fact of suppression by way of evasion of tax would not have been known. Referring to the order passed by the Commissioner (Appeals) in para 6.1, 6.2 and 7 where reference to order-in-original is made by the Commissioner (Appeals), ld. AR argued that the appellant had collected service tax amount during the period April 2010 to June 2011 but had not deposited the same in government exchequer nor disclosed the same on its own to the department and the statement of one of its partners indicates that such service tax liability was not discharged due to cash flow and fund problem which itself indicates that tax liability was well within the knowledge of the appellant firm who had intentionally withhe

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ing material facts, had there been no intervention by the department. This being the factual aspect, it cannot be said that appellant had a bonafide intention to discharge duty liability and it could not do so due to incapacity. The other ground cited by the appellant in placing reliance to the statement of the partner is that they did not get payment against work done for Tata Telecommunications but nowhere in the reply to the show-cause notice or personal hearing, they had established that in between raid conducted on 16.08.2011 and payment made on 18.08.2011 the appellant had in fact received such payment and promptly discharged its duty liability. Further, appellant wants its case to be covered under Section 73(3) but to being it to its preview, the fact of duty liability should not have been in its knowledge and should have been brought to its notice by the central excise officer. In that context, no such material is forthcoming that appellant was ignorant of its duty liability an

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M/s AMIT COTTON INDUSTRIES THROU PARTNER, VELJIBHAIVIRJI BHAI RANIPA Versus PRINCIPAL COMMISSIONER OF CUSTOMS
GST
2019 (1) TMI 303 – GUJARAT HIGH COURT – 2019 (23) G. S. T. L. 463 (Guj.)
GUJARAT HIGH COURT – HC
Dated:- 20-12-2018
R/SPECIAL CIVIL APPLICATION NO. 20126 of 2018
GST
MS HARSHA DEVANI AND DR A. P. THAKER, JJ.
For The Petitioner (s) : MR D K TRIVEDI (5283)
ORAL ORDER
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. The learned advocate for the petitioner has tendered a draft amendment. The amendment is allowed in terms of the draft. The same shall be carried out forthwith.
2. The learned advocate for the petitioner invited the attention of the court to the provisions of section 16 of the Integrated Goods

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the present case. Reference was made to the e-mail dated 28.11.2018 issued by the IGST Section, Customs House, Mundra drawing the attention of the petitioner to the Board Circular No.37/2018-Customs dated 9.8.2018 wherein it is clearly mentioned that by declaring drawback claim serial number suffixed with A or C, the exporters consciously relinquished their IGST/ITC claim. Reference was made to Circular No.37/2018-Customs dated 9.10.2018 to submit that the same does not relate to IGST and would have no applicability to the facts of the present case. It was submitted that in any case, the petitioner has already returned back the differential drawback amount, and hence, there is no impediment in the way of the respondents in granting the ref

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M/s Raj Iron And Building Materials Versus Union of India And 3 Others
GST
2019 (1) TMI 195 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 20-12-2018
Writ Tax No. – 1665 of 2018
GST
Pankaj Mithal And Pankaj Bhatia, JJ.
For the Petitioner : Aloke Kumar
For the Respondent : A.S.G.I.,C.S.C.
ORDER
The petition has been filed challenging the seizure/ retention order passed by the respondent No. 4 on 15.12.2018 as well as the notice issued to him dated 15.12.2

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M/s PATRAN STEEL ROLLING MILL Versus ASSISTANT COMMISSIONER OF STATE TAX, UNIT 2
GST
2018 (12) TMI 1441 – GUJARAT HIGH COURT – 2019 (20) G. S. T. L. 732 (Guj.) , [2019] 65 G S.T.R. 177 (Guj)
GUJARAT HIGH COURT – HC
Dated:- 20-12-2018
R/SPECIAL CIVIL APPLICATION NO. 16931 of 2018
GST
MS HARSHA DEVANI AND MR A. P. THAKER, JJ.
For The Petitioner : MR D K TRIVEDI (5283)
For The Respondents : MR UTKARSH SHARMA, ASSTT. GOVT. PLEADER
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner seeks the following substantive reliefs:
“[C] Your Lordships may be pleased to issue writ of mandamus or any other appropriate writ directing the respondent authorities to immediately remove attachment of bank accounts of (1) Axis Bank, Bhavnagar, viz., Nos. (a) C/C A/c No.917030053366001, (b) CURRENT A/c No.917020055857122 and (c) Savings A/c No.200010100069386 of Mr. Manish Bansal, (

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of the petitioner company. During the course of such visit, he carried out comparison of the physical stocks of raw material and finished goods with recorded the quantity of the same and found that there was a stock difference, inasmuch as physical goods valued at Rs. 51,73,633/- were found in excess in the factory premises when compared to the recorded quantity. It appears that the first respondent also carried out investigation at the end of a transporter, according to whom, the petitioner had supplied and received goods without payment of tax and therefore, the tax was payable. It is the case of the petitioner that under pressure, threat and duress, the first respondent obtained a statement of the proprietor of the petitioner firm and further pressurized the petitioner to deposit Rs. 17,00,000/-. The respondents also claimed that a total of Rs. 55,37,237/- was payable by the petitioner and obtained post-dated cheques of the differential amount from the petitioner under pressure, th

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orities to release its bank accounts; however, to no avail. It is the case of the petitioner that on account of seizure of its goods as well as attachment of the bank accounts, the petitioner is not in a position to carry on its day to day business and make payment of statutory dues like GST, income tax, local taxes, etc. It is in these circumstances, that the petitioner has approached this court seeking the reliefs noted above.
3. Mr. D. K. Trivedi, learned advocate for the petitioner submitted that the provisional attachment in this case has been made under section 83 of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as “the GGST Act”). It was submitted that sub-section (1) of section 83 of the GGST Act provides that where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it i

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achment. It was submitted that even if the case of the respondents is taken at face value, at best, the tax liability of the petitioner would come to Rs. 13,84,000/- and therefore, the amount of Rs. 17,00,000/- deposited by the petitioner should be sufficient to protect the interests of the revenue. It was, accordingly, urged that therefore, the attachment of the bank accounts is required to be removed and the goods seized by the respondents are required to be released.
4. On the other hand, Mr. Utkarsh Sharma, learned Assistant Government Pleader, placed reliance upon the averments made in the affidavit-in-reply filed on behalf of the respondents. A perusal of the averments made in the affidavitin- reply shows that the respondents have mainly relied upon the admissions made by the petitioner on the day of the search, despite the fact that the statement was subsequently retracted by the proprietor of the petitioner firm.
5. A perusal of the computation of tax as made by the first res

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nalty having been imposed, in the opinion of this court, the respondent authorities were not justified in resorting to such a drastic coercive measure of attachment of the bank accounts and seizure of goods, which results in bringing the business of the petitioner to a grinding halt.
7. Sub-section (1) of section 83 of the GGST Act provides that where the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person. On a plain reading of the said provision, it is evident that before resorting to such drastic action, the Commissioner is required to form an opinion that it is necessary to do so to protect the interest of the revenue. For the purpose of arriving at such an opinion, the Commissioner should first form an opinion that the petitioner would not be in a position to pay the tax dues after th

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17,00,000/- during the course of the search proceedings shall not be construed as an admission of such dues on the part of the petitioner.
8. Before parting, the court deems it fit to caution the concerned authorities that while exercising powers under section 83 of The GGST Act, the authorities should try to balance the interest of the Government revenue as well as a dealer to ensure that while the interest of the revenue is safeguarded, the dealer is also in a position to continue with his business, because it is only if the dealer continues with the business that he would generate more revenue. The authorities should keep in mind that bringing the business of a dealer to a halt does not in any manner serve the interest of the revenue. Therefore, while taking action under section 83 or 67(2) of the GGST Act, the concerned authorities should take care to ensure that equities are maintained and while securing the interest of the revenue, they should attempt to see that the dealer is i

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M/s S.R. Traders Imampur Resalabagh Versus State Of U.P. And 3 Others
GST
2018 (12) TMI 1273 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 20-12-2018
Writ Tax No. – 1684 of 2018
GST
Pankaj Mithal And Pankaj Bhatia JJ.
For the Petitioner : Suyash Agarwal,Ankur Agarwal
For the Respondent : C.S.C.,A.S.G.I.
ORDER
In respect of the seized goods and vehicle under Section 129(1) of the GST Act the petitioner has already deposited the tax and the penality but e

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Mangalore Ganesh Beedi Works Versus State Of U.P. And 2 Others
GST
2018 (12) TMI 1225 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 20-12-2018
Writ Tax No. – 1679 of 2018
GST
Pankaj Mithal And Pankaj Bhatia JJ.
For the Petitioner : Shubham Agrawal
For the Respondent : C.S.C.
ORDER
The goods and the vehicle in transit have been seized as during physical verification the goods were less in quantity then mentioned invoice.
Sri C.B. Tripathi, may seek inst

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M/s Ram Naresh Rama Kant Versus State Of U.P. And 3 Others
GST
2018 (12) TMI 1224 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 20-12-2018
Writ Tax No. – 1688 of 2018
GST
Pankaj Mithal And Pankaj Bhatia JJ.
For the Petitioner : Ankur Agarwal,Suyash Agarwal
For the Respondent : C.S.C.,A.S.G.I.
ORDER
The order of seizure under Section 129(1) is under challenge. Learned counsel for the petitioner is ready to furnish security to the satisfaction of the auth

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M/s. Elango Industries Ltd., Shri S. Elangovan, MD, Shri S.A. Prem Kumar, M/s. Goyal Ispat Ltd. Versus Commissioner of GST & Central Excise Puducherry
Central Excise
2018 (12) TMI 1108 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-12-2018
Appeal Nos. E/162 to 164/2011 and E/107/2011 – Final Order Nos. 43123-43126/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri N. Viswanathan and Shri A. Mudimannan, Advocates for the Appellant
Shri K. Veerabhadra Reddy, ADC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellant M/s. Elango Industries Ltd. (herein after referred to as M/s. EIL) is engaged in manufacture of MS ingots. Based on intelligence that they were evading payment of central excise duty by suppression of production and clandestine removal of MS ingots, the officers of DGAE conducted search operations in the appellant's factory on 6.5.1997 and recovered docum

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d notice dated 17.6.1998 was adjudicated earlier by the Commissioner and taking note of the fact that period of seven months is overlapping with the period of first notice and that appellant had paid 50% of the duty in the earlier show cause notice, he confirmed Rs. 6,73,546/- as duty with reference to clandestine clearance of finished products and the demand of MODVAT credit was confirmed to the tune of Rs. 40,500/-. Penalty under section 11AC read with Rule 9(2) and Rule 173Q and Rule 57I of Central Excise Act, 1944 was imposed on M/s. EIL. Separate penalty under Rule 209A was imposed on Shri Elangovan, MD of M/s. EIL, M/s Goyal Ispat, Shri Premkumar, Director of M/s. EIL, Shri T.K. Raghunathan, GM of M/s. EIL, Shri S.Sankar PO of M/s. EIL, Shri G. Odayappan Managing Partner of M/s. ASRM and Shri Vijay Jain of M/s. Subash Trading Co. The adjudicating authority dropped proposal to impose penalty against remaining persons like transporters, supplier of inputs / dealers etc.
1.3 An app

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MODVAT credit. Equal penalties are imposed on M/s. EIL under Rule 173Q (1) (a), (b), (d) r/w Rule 9(2) and Rule 226 of Central Excise Rules, 2002. Penalty under Rule 209A is imposed on Shri S. Elangovan, MD of M/s. EIL, M/s. Goyal Ispat, Shri A. Premkumar, Shri T.K. Raghunathan, Shri S. Sankar, Shri G. Odayappan and Shri Vijay Jain. Aggrieved by such order, M/s. EIL, Shri S. Elangovan, MD of the appellant-company, Shri Prem Kumar and the dealer M/s. Goyal Ispat Ltd. have filed these appeals.
2.1 On behalf of the appellants, ld. counsel Shri N. Viswanathan and Shri A. Mudimannan appeared and argued the matter. Shri N. Viswanathan submitted that the Tribunal had remanded the matter to the adjudicating authority to consider afresh the issues regarding allegation of clandestine clearance as well as wrong availment of MODVAT credit. There was specific direction that the penalties which were set aside by the adjudicating authority in the earlier proceedings on the transporters, dealers etc

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, the department has not verified the payment of electricity charges. The electricity consumed by office of the factory, general maintenance and other connected places have not been taken into account by the adjudicating authority while arriving at the electricity consumed per heat. The quantity of waste also has been totally ignored. The appellant had paid up the duty and settled the earlier proceedings only to buy peace with department and to avoid litigation.
2.3 In any case and without prejudice, the respondent ought to have seen that for the periods between 21.3.1995 and 28.10.1995, the demand was quantified based on the maximum production the unit could make and the demand for duty on the clandestine removal determined based on power consumption to the extent of 1307.55 MTs was demanded and settled under the KVSS. So the claim of department that the DGAE notice has quantified the demand on different set of buyers compared to the earlier notice has no logic at all. The unit is no

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n its final order dated 7.8.2008. The statement of the transporter or the documents furnished by him cannot be relied as the issue of penalty on the transporter having attained finality, the same evidence cannot be applied against the appellant to hold that the appellant has cleared the goods clandestinely with the help of the transporter. The mere statements of Nagappan, A. Rawther, the alleged brokers cannot be relied without corroboration. They have stated that the statements were made under coercion. Therefore, the case of the department that these persons assisted in procuring unaccounted raw materials by payment in cash is not sustainable. Again, when the statements of such persons which have been relied upon by the department to issue the show cause notice and demand duty as well as recover MODVAT credit has been fully held to be unreliable so as to drop the proceedings against such persons, the deposition of the very same co-noticees cannot be relied against the appellant to de

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f such charges of clandestine clearance of finished product. The wrong availment of credit is alleged stating that there is difference in the quantity shown in commercial invoice and the excise invoice. The difference if any is very less and of 1 to 2 MTs in few occasions and cannot form basis for alleging clandestine removal of about 1700 MTs.
2.8 The other evidence relied upon by the department is the bank account of Shri Prem Kumar who is one of the Directors. It is the case of department that he was maintaining accounts wherein cash from clandestine clearance was deposited. The said director has clearly stated that he was having other construction activities and had maintained receipts and expenditure with regard to such transactions. The department has wrongly proceeded on presumption that these are financial transactions relating to clandestine clearance of goods. This explanation was not considered or verified by department.
2.9 The entire case of department is built on isolat

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mitting that there could be supply of better variety scrap to M/s. EIL. Their contradictory statements would show that they have supplied unaccounted raw materials to M/s. EIL. The commissioner has not imposed any penalty on these dealers / suppliers only because of the direction of the Tribunal that no penalty can be imposed upon such persons in denovo adjudication. However, their role for supply of unaccounted raw materials is brought out from their statements.
3.2 The second allegation is with regard to unaccounted clearance of finished products. The main argument of the ld. counsel is with regard to the production capacity and that the alleged quantity cannot be manufactured by the appellant. He adverted to para 21 of the show cause notice. From the evidence gathered, it is clear that appellant had been suppressing the actual production by showing lesser heats in their log sheets for the period from October 1995 to August 1996. For the months of December 1996 to May 1997, M/s. EIL

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of M/s. EIL, it was seen that one Shri Muthusamy, who was an ex-employee of Anjaneya Steel Rolling Mills (M/s. ASRM) was depositing cash in the said account maintained by Shri Prem Kumar. Shri Prem Kumar has not been able to give proper explanation for these cash deposits made by Shri Muthusamy. It is very much clear that the cash deposits are the funds received from unaccounted clandestine clearance of finished products. The department has been able to prove the unaccounted purchase of raw materials as well as clandestine clearance of finished products and therefore the demand of Rs. 24,13,918/- against clandestine clearance and disallowance of MODVAT credit to the tune of Rs. 18,93,298/-, the interest thereon and the penalties imposed are legal and proper.
4. Heard both sides.
5.1 The allegations are two-fold. Firstly, that the appellant has purchased unaccounted raw materials and also availed fraudulent MODVAT credit to the tune of Rs. 18,93,298/-. Secondly, that the appellant has

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rated by the Commissioner by setting aside the penalty imposed in the earlier proceedings and the said findings have become final as observed by the Tribunal in its Final Order dated 7.8.2008. Taking this into consideration, we may now address the arguments put forward by the ld. AR adverting to para 96 (96A) of the impugned order. The Commissioner has concluded that there has been unaccounted purchase of raw materials merely for the reason that in cross-examination, the traders / suppliers have deposed that there might have been a mixing up of scrap at their end. We do not find any logic in drawing inference from such statements that the appellants have procured unaccounted raw material. Apart from such statement, there is no evidence adduced by the department to show that the appellants have procured unaccounted raw materials. The other evidence is that some katcha slips were recovered from the residence of Shri Elangovan which showed payment details of scrap. That in the commercial

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8/- It is to be stated that an earlier show cause notice dated 18.8.1997 was issued to the appellant covering the period from 3.11.1994 to 28.10.1995. Almost seven months of the present show cause notice overlaps with the earlier show cause notice which was settled under KVS Scheme by paying 50% of the duty demand. In such show cause notice and settlement, the duty demand was quantified on the basis of production capacity / electricity consumption. The department was also part of such settlement. However, in the second show cause notice, the department has quantified the demand on different basis which is evidence of dealers and buyers of finished goods. We do not understand how at least for the overlapping period, the department can adopt a different method for quantifying the demand when the production capacity on the basis of electricity consumption has been the basis for quantifying the demand for a period of seven months overlapping in the earlier show cause notice. It is worthwhi

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is different from the formula accepted by both sides for the purpose of settlement under the KVS Scheme cannot be sustained insofar as the overlapping period is concerned. The question which now arises for consideration is whether a different formula is applicable to the rest of the period of dispute covered by DGAE (CE) notice. The show cause notice have offered factual support to adoption of such different formula for a part of the period of dispute. No such thing is forthcoming in the present case.”
(emphasis supplied)
5.5 Even in the denovo proceedings, the department has not been able to establish the reason for applying a different formula for demanding duty for the overlapping period. We have also to mention that when we have already concluded that the department has failed to establish procurement of unaccounted raw materials and when there is no discrepancy with regard to the stock of raw materials and finished products, noted by the department, the allegation of clandesti

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rence in quantity in some cases. For eg. Against net weight of ingots of 11.065, 12,060, 12.625 MTs. cleared on 30.1.1996, the invoices show only 9.065, 10.060 and 10.265 MTs. The difference is 1 to 2 MTs only. The allegation is that M/s. EIL cleared 1752.34 MTs clandestinely. Such minor differences in quantity in few instances are not sufficient to prove clandestine clearance of huge quantity of MS Ingots. The other evidences are the statements of brokers like D. Nagappa, R. Kumar etc. Such statements can be relied only with corroboration of documents since clandestine clearance is a serious charge. Apart from some katcha slips and private documents, department has not been able to prove the correlation of clearance of such huge quantity of finished goods with the stock / account of the buyers. Though one to one correlation may not be possible, a probable case has to be made out which is totally lacking before us.
5.8 It is further to be noted that on physical verification of stock,

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GST leviability at the Capital Goods Reimport in india
Query (Issue) Started By: – jamal zaidi Dated:- 19-12-2018 Last Reply Date:- 20-12-2018 Goods and Services Tax – GST
Got 3 Replies
GST
Dear All,
Need your professional rigor view, at the below query-
X company registered in India, purchased a machinery from Japan for manufacturing purposes, now due to some technical fault the Machine has to be export to Japan for repair purpose and as soon as this machine repaired the same has

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Working to bring 99 pc things in sub-18 pc GST slab: Modi
GST
Dated:- 19-12-2018

Mumbai, Dec 18 (PTI) Indicating that further simplification of the Goods and Services Tax is on the anvil, Prime Minister Narendra Modi said his government wants to ensure that '99 per cent things' attract sub-18 per cent GST slab.
Before implementation of the GST, registered enterprises only numbered 65 lakh, which has now risen by 55 lakh, Modi said, addressing the Republic Summit here.
"Today, the GST system has been established to a large extent and we are working towards a position where 99 per cent things will attract the sub-18 per cent GST slab," Modi said.
Modi indicated that the 28 per cent slab of GST would only be

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improving. The economy is also getting transparent," Modi said.
Even a small tax reform in developed countries is not easy, he said.
Modi also spoke of his government's commitment to root out corruption.
"Corruption had been taken as a new normal in India.
It was 'Chalta hai'. Whenever anyone used to speak up, someone would say, 'This is India. This is how it is'," Modi said.
"Why should it be like this," he said.
When companies used to be unable to repay loans, nothing used to happen to them and their owners, he said.
"That is because since the start they had been given protection from probes by certain 'special people', he added.
Modi also dwelt on his government's init

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Development of new return filing system by GSTN
GST
Dated:- 19-12-2018

GSTN will focus on the development of new return filing, further improving the user interface, and Business Intelligence and Analytics. While the new return is yet to be notified, GSTN has started development of the components in which major changes are not expected. Improvement in User Interface on the basis of feedback is a continuous process. Few important initiatives/improvements made for better User experience are: –
* Questionnaire for filing GSTR-3B to avoid errors by taxpayers.
* Option to generate pre-populated Challan by the system to avoid depositing Cash in wrong Head by the taxpayers.
* Introduction of one click Nil return filing.
* Sug

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Applicability of GST on manufacturing activity done by contractor
Query (Issue) Started By: – MohanLal tiwari Dated:- 19-12-2018 Last Reply Date:- 21-12-2018 Goods and Services Tax – GST
Got 8 Replies
GST
Dear Panelists,
We are manufacturer of castings / machinery parts (mainly for Railways) falling under 8607. In our factory premises, we are providing all required materials, machinery & equipment etc and getting in-process manufacturing activities done through contractors for various operation like molding / finishing / machining etc. During Excise & Service tax regime, such services were not attributable to service tax.
Now, most of contractors are GST compliance and issuing invoices charging GST @18% which is getting accum

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ay be.
Reply By KASTURI SETHI:
The Reply:
Supposing it is job work, even then it is taxable as under GST job work is taxable supply of service. In pre-GST era, Central Excise duty was leviable depending upon the nature of processes. GST cannot be avoided in any situation.
Reply By MohanLal tiwari:
The Reply:
Dear Sethi Sir,
Thanks for clarification.
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
I endorse the views of Shri Sethi. Avoiding to charge the tax is not the objective of GST laws. You can plan according to the provisions of tax and not with intention to avoid tax.
Reply By MohanLal tiwari:
The Reply:
Govindrajan Sir,
Thanks. I appreciate your views.
Reply By KASTURI SETHI:
The Reply:
Tax avoidance is legal but tax ev

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GST Levy on Intermediary Services: Section 12 and 8(2) Inapplicable for Recipients Outside India.
Case-Laws
GST
Levy of GST – place of supply of services – intermediary services – When recipient is located outside India the said provisions of section 12 cannot be made applicable and since provisions of section 8(2) are inter-linked with provisions of section 12, the same cannot be made applicable in case the recipient of service is located outside India.
TMI Updates – Highlights, qu

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No Violation of CGST Act: Eastern Meat Masala Supplier Cleared of Profiteering Allegations.
Case-Laws
GST
Profiteering – supply of “Eastern Meat Masala” – benefit of reduction in the rate of

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Type of GST to be applied
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 19-12-2018 Last Reply Date:- 19-12-2018 Goods and Services Tax – GST
Got 4 Replies
GST
XYZ(Maharashtra) sold Control Panels to PQR(Maharashtra) by charging CGST + SGST. These panels were subsequently sold by PQR to ABC (Goa). Further, XYZ had done the installation of the panel at the Goa site of ABC on behalf of PQR and charged CGST + SGST to PQR in the service invoice towards installation. Is it correct or they should have charged IGST since the services were performed outside Maharashtra?
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
In my view IGST is not applicable.
Reply By Kaustubh Karandikar:
The Reply:
Thanks for your reply. But in my

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In Re: Cummins India Limited
GST
2019 (3) TMI 656 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (23) G. S. T. L. 356 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 19-12-2018
GST-ARA- 65/2018-19/B-161
GST
SHRI B.V. BORHADE, AND SHRI B. TIMOTHY, MEMBER
PROCEEDINGS
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Cummins India Limited, the applicant, seeking an advance ruling in respect of the following issue.-
“Determination of GST liability by deciding principal supply of the composite supply qua maintenance contracts executed between the customer and the Applicant”.
At the outset, we would like to make it clear that the provisions of both the CG

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oviding goods and services which qualify as 'supply' as per provisions of the Central Goods and Service Tax Act, 2017 (“CGST Act”) and is duly registered thereunder bearing GSTIN 27AAACC7258B1zW,
3. The Applicant is inter alia engaged in the business of manufacturing diesel and natural gas engines and this business can broadly be bifurcated as follows:-
* Engine business – It manufactures engines of 60 HP which is generally used in automobile industry
* Power Systems business – This unit manufactures high horsepower engines of 700 HP to 4500 HP which are used in marine, railways and defense.
* Distribution business – It provides after sales services to its customers which includes supply of spare parts, maintenance services, rebuilding of engines and batteries.
4. The Applicant executes an Annual Maintenance Contract (“AMC”) with end customers to provide maintenance services to their customers which aid in keeping customer's engines in a good working condition. Thes

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nd the value for such parts or consumables are recovered from the Applicant under AMC.
6. These goods, consumables etc. required for undertaking activities referred under AMC are made available to the customers by dealers themselves, except customers. Engaged in mining industry in which case the goods are supplied from the depots of the Company directly.
7. Given the above background and keeping in mind the fact that the transaction involves supply of services and goods, present application is being preferred before the Hon'ble Authority for Advance Ruling to decide the taxability of the underlying transaction.
STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE QUESTIONS RAISED
Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s)
1. ISSUE FOR DETERMINATION
Determination of GST liability by deciding principal supply of the composite supply qua maintenance contracts executed

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ct'. In the present facts, the Applicant is engaged in providing repair and maintenance in respect of engines which are movable in nature and hence, it would not be considered as 'works contract'. Therefore, it is necessary to analyze the definition of 'composite supply as given in Section 2(30) of the CGST Act. Relevant extract of the same is reproduced below for ease of reference:-
“(30) “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;”
2.3. On perusal of the above definition, it appears that a composite supply means and includes multiple supplies of goods or services or both which are supplied together in the ordinary course of business. Accordingly, the definition of composite supply provides for tw

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ST Act, the tax structure applicable thereto including determination of assessable value, classification, tax rate etc. needs to be determined with reference to the principal supply comprised thereunder. The term 'principal supply' is defined under Section 2(90) of the CGST Act and is reproduced below:-
“(90) “principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite apply is ancillary;”
2.6. On scrutiny of the above referred definition, it is submitted that principal supply basically signifies the supply of goods/services that form a substantial or a predominant element of a composite supply and all other related supplies are ancillary in nature. Accordingly, in order to decide the taxability of the underlying transaction, it is important to determine the 'principal supply of the transaction i.e. dominant intention behind the contract.
2.7. It is su

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lity of the contract. Relevant extract of the judgment is reproduced below for your easy reference:-
“The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in person performing work or rendering service and no property in the thing produced as a whole In case of a contract for sale, the thing produced as a whole had individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto the other party price.”
2.9. The above judgment has laid down the primary test to determine the taxability of the transaction. It states that the contract whose main object is transfer of property in a chattel to the buyer even though some work may be required to be done under the contract, is incidental to the sale. Based on the aforesaid analogy, the Hon'ble Courts in the following judgments have held that the contract is f

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F INDIA The Appellant is engaged in the business of photocopying. It was decided that the contract between the Appellant and the customer is a contract of work or service, not a contract of sale.
2.10. Accordingly, in the present facts, it is submitted that there is no intention of transfer of property in goods to the customer. The engines on which maintenance activity is being carried out by the Applicant belongs to the customer itself. Further, the maintenance contract has been executed by the customer to avail the services of professionals who are expert in the field of maintenance of the engines attached to the machines such as gensets, excavators, dumpers etc. It is submitted that the intention of an annual maintenance agreement is to ensure that systems/machines should function properly. Maintenance of the machines helps to extend the life of the machine, maximize the energy efficiency of the equipment and eliminate unexpected system failure. Such AMC's are generally execute

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quired with the Bank
Failing which the Bank, will decide for location/DG set specific (as the case may be) penalty to be levied @ 10% of AMC amount payable/paid under. Annual Maintenance Contract in respect of assets installed at such location locations, per instance of delayed TAT's for the SLA as agreed in Annexure II attached herewith.
…………………
Part-ll: Obligations of Cummins:-
a. To ensure that uptime of equipment will be to an extent of 92% per annum
b. CAMC scope is revised with inclusion of out of jobs like all minor and major repairs providing rental DG sets during down time, Battery etc will be part of CAMC scope.
C. Requesting services:-
1. Four preventive maintenance visits per annum – Mandatory Quarterly PM visit
2. Maintenance of DG Set will be carried out as per manufacturer's standord practice.
……………… For C and D check only filters and lube oil shall be provided by Cummins.
All other parts and repairs shall be charged at actual.

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* Replacement or supply of major parts of the machine are specifically excluded from the scope of contract.
* Fixed price has been decided for the AMC.
2.13. It is settled position: that intention of the contract is required to be understood in terms of the clauses of the agreement. Considering the factuat position narrated in Para 2.12 above, it is also submitted that the dominant intention of the activity would be considered as service where skill is important rather than supply of goods. The same can be corroborated by the following facts:-
* Mere availability of parts/components, in absence of an engineer competent to use this, neither suffices the customer's requirement nor discharges Applicant from its obligation under AMC;
* Applicant's obligation under AMC had been at numerous times suitable discharged by merely applying intellect, efforts and monitoring, without necessitating any part/ component
2.14. In light of the above, it is submitted that the main object

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determined as per the definition provided under Section 2(15) of the IGST Act which is as under:
“location of the supplier of services means,-
(a) where o supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(b) where a supply is made from a place other than the place of business for which registration has been obtained a fixed establishment elsewhere), the location of such fixed establishment;
(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and
(d) in absence of such places, the location of the usual place of residence of the supplier”
2.17. In view of the above definition, registered premises from where supply is made is considered as location of the service provider. Accordingly, in the present facts, maintenance services are provided by the Ap

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-Since the supply of maintenance service is for a one and fixed price with or without supply of spare parts/goods and supply of service and goods is made in conjunction with each other in the ordinary course as per maintenance contracts, this maintenance service to the extent of presence of all the necessary ingredients cited in the legal provisions quoted supra, is naturally, bundled with the incidental supply of goods., it is case of composite supply of service,
b) In case the said contract is considered as composite supply, what is the principal supply between goods or services? Ans. – The said contract merits to be considered to be a composite supply of service, and principal supply is service inasmuch as the supply of goods is merely incidental to the maintenance contract in the given facts and circumstances.”
2.20. On a bare perusal, it is submitted that the Ruling referred above relates to identical issue of determination of principal supply involved in a composite supply. I

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issues. Comments on their application are as under:
I. Determination of Principal Supply
The applicant stated that they are engaged in the business of manufacturing diesel and natural gas engines and also engaged in distribution business which provides after sales services to its customers which includes supply of spare parts, maintenance services, rebuilding of engines and batteries. As per their submissions, they execute an Annual Maintenance Contract (AMC) with end customers to provide maintenance services to keep customer's engines in a good working condition. The AMC primarily include carrying out routine maintenance, preventive maintenance, inspection of parts, supply of consumables and other repairs and replacements.
The applicant submitted that the AMC undertaken by them falls under 'composite supply' as it consists of two or more taxable supplies of goods or services or both and hence, the applicable tax structure is to be determined with reference to the princi

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out supply of all maintenance consumables, periodic maintenance and troubleshooting in engines and alternators. Also, in their application, at para 2.11 the applicant submitted text of a portion of the AMC agreement which explains the obligations of Cummins under the maintenance agreement which is reproduced as under:
Part-II: Obligations of Cummins:-
a. To ensure that uptime of equipment will be to an extent of 92% per annum.
b. CAMC scope is revised with inclusion of out of jobs like all minor and major repairs providing rental DG sets during down time, Battery etc. will be part of CAMC scope
c. Requesting services:-
* Four preventive maintenance visits per annum-Mandatory Quarterly PM visit
* Maintenance of DG set will be carried out as per manufacturer's standard practice …………….. For C and D check only filters and lube oil shall be provided by Cummins. All other parts and repairs shall be charged at actual.
* To supply all maintenance consumables covered un

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parts of the machine are specifically excluded from the scope of contract.
VI. Fixed price has been decided for the AMC.
In view of the above and the fact mentioned in the copy of the Maintenance agreement submitted to this office, it appears that the predominant element of supply under AMC is supply of service.
04. HEARING
The case was scheduled for 11.09.2018 for Preliminary hearing when Sh. Rohit Jain, Advocate along with Sh. Narender Vaidya, DGM Taxation appeared and made oral contentions for admission of application as per contentions in their ARA application. Jurisdictional Officer Sh. B. K. Mishra, Supt., Pune II, CGST Commissionerate appeared and stated that they would be making submissions in due course.
The application was admitted and called for final hearing on 27.11.2018, Sh. Rohit Jain, Advocate along with Deepak L Bahirwani, Tax Director-Cummins India Group, Group CFO's Officer and Sh. Vivek Baj, C.A. ELP appeared and made oral contentions as per details submitt

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Engines fitted on BH160M Dumpers a/c CCI”. We find that the applicant executes an Annual maintenance Contract (“AMC”) with end customers to provide maintenance services, which helps in keeping customer's engines in a good working condition. These services are provided for a fixed charge based on the nature of maintenance activity that may be required, which includes carrying out preventive maintenance, routine maintenance, general inspection of parts, supply of consumables, etc. As per terms of the AMC agreement between the customer and the Applicant, the Applicant is responsible to upkeep the engines in good working condition by undertaking regular maintenance. In order to provide immediate services to the customer and to keep the minimum downtime of the engines, the Applicant has engaged dealers who provide maintenance services to the customers on their behalf and if required to utilize consumables, parts etc., they can do so at their discretion (i.e: without any prior permission

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ervices mentioned in the contract. The goods, material, spare parts, etc. are required to be supplied only when necessary i.e. when, during the course of maintenance services it is found by the skilled personnel that there is a need for such parts which will effectively keep the runtime of the DG Sets at maximum acceptable time.
Now, to arrive at a decision, we first of all will refer to the definition of 'composite supply which is given in Section 2(30) of the CGST Act, 2017 and is reproduced below:-
“(30) “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;”
Thus it is clear that a composite supply means that there is a supply of two or more goods or services together and such goods or services are provided together

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whether it is a supply of goods or supply of services. Therefore we refer to the definition of the term 'principal supply' which is defined under Section 2(90) of the CGST Act and is as under:-
“(90) “principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary;”
In the subject case it is seen that even though the AMC covers both, supply of goods and service, the predominant intention is to provide maintenance services for the proper upkeep of the machines belonging to their clients and, supply of goods follows as a consequent to the supply of maintenance service. Hence we find that supply of maintenance service is the dominant intention of the contracts and can be considered as the 'principal supply'.
Now that we have found that the principal supply in the transaction before us is supply of service, then the place of supply is

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In Re: NES Global Specialist Engineering Services Private Limited
GST
2019 (3) TMI 594 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (22) G. S. T. L. 541 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 19-12-2018
GST-ARA-52/2018-19/B-160
GST
SHRI B. TIMOTHY, AND SHRI B. V. BORHADE, MEMBER
PROCEEDINGS
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by NES GLOBAL SPECIALIST ENGINEERING SERVICES PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following questions.-
(i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST ACT?
(ii) If the said supply is a Zero Rated Supply, then can the s

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in providing supply of man-power services to highly technical industries such as Oil and Gas, Power, etc. GST Regn number:- 27AACCN9033F1ZI & C1N :- U72200MH2008FTC288230
Brief of Abu Dhabi Company
NES Global Talent Recruitment Services (NES Abu Dhabi) whose registered office is situated at Unit 104, Business Avenue Tower, A1 Salaam Street, P.O. Box no 63107, Abu Dhabi. Foreign Tax Identification number:-100069908000003
Brief of Parent Company in UK
Both tine above mentioned companies i.e. NES India and NES Abu Dhabi are subsidiary companies of the parent company named NES Global Limited (NES UK) , which is a registered company in the United kingdom.
Unique Tax Reference number :- 4008011199.
Brief of transaction
NES India & NES Abu Dhabi have proposed to enter into a service agreement through which NES India will provide support service in respect of the foreign business carried on by NES Abu Dhabi.
Every service provided by NES India will form part of the Master Services Agre

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d in India for providing the desired services, as identified and allocated with a margin of 10% plus taxes as applicable during the period.
Written Submission, being the Part and Parcel of the Application for Advance Ruling submitted with the Advance Ruling Authority on 06.07.2018.
Justification for considering the transaction as export of service.
1. We understand that Learned CGST Officer had informed in last hearing dated 12.12.2018 that the copy of Master Service Agreement (MSA) had not been produced for verification. The Service Provider, NES Global Specialist Engineering Services Private Limited (NES India) and the Service receiver, NES Global Talent Recruitment Services (NES Abu Dhabi are associate concerns, had made an “INTER COMPANY SERVICE AGREEMENT” and the same had furnished with you, already and the same be considered as MSA, for all purposes, and request to waive the variation in Nomenclature, if any.
2. Further we are enclosing copy of Invoices – (Exb- 1) & Bank Stat

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y the supplier of service in convertible foreign exchange; (as mentioned supra) and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.
Sample of Organizational Chart for Opening of Account & Account Servicing
 
II. STATEMENT OF INTERPRETATION OF LAW AND/OR FACTS:
The applicant is on the view that above transaction will fall under Export of Service, on considering the fulfilment of the conditions as per the GST Act and provisions.
Export of Services conditions under GST as summarised below:
Under the provisions of the IGST Act, if a transaction of service provision meets all the conditions of “export of services” as defined in Section 2(6) of the said act, then such transaction will be treated as an export of service and qualify as a Zero Rated Supply as per section 16(1) of the Act.
Section 2(6) of the IGST Act defines “Export of Services”, as follows:
“Export of Servic

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nditions as listed in section 2(6) of the IGST Act, as follows:-
(i) the supplier of service i.e. NES India is located in India and is reregistered under the GST Act in the State of Maharashtra ;
NES India will provide services to NES Abu Dhabi as per MSA and for doing so, NES India will employ persons in India and also take office space on rent in its own name, which indicates that provider of services is located in India.
(ii) the recipient of service i.e. NES Abu Dhabi is located outside India and is registered at Abu Dhabi;
As per MSA, NES Abu Dhabi will list of services (example given above) that it needs NES India to provide in respect of its office and business in Abu Dhabi, which indicates that recipient of services is located in Abu Dhabi.
(iii) the place of supply of service is outside India in terms of Section 13(2) of the IGST Act;
Section 13(1) of the IGST Act is to be referred to, to determine the Place of supply of services provided, in a situation where the locati

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vice has been received by the supplier of service in convertible foreign exchange; and
NES Abu Dhabi will remunerate NES India for the services provided by it from India, in convertible foreign exchange, hence meeting the said condition.
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8
NES India and NES Abu Dhabi are not establishments of the same person, even though they are group companies.
The Shareholding pattern of both the companies proves that the Key management personal and Board of Directors are different and neither of them holds shares of each other and thus they do not control one another. (Related documents proving the same have been attached).
NES India is not a branch or an agency or a representational office of NES Abu Dhabi and both the companies are independent of each other.
It is important to draw attention to the fact that, even the MSA states that this tr

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ledonia Sahar Road, Andheri (East), Mumbai 400069 (GSTIN: 27AACCN9033F1ZI) (here in after referred to as 'the applicant') has filed above application under Section 98 of the Central Goods and Service Tax Act, 2017 read with Rule 104 (1) of the CGST Rules, 2017 seeking advance ruling on:-
(i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act?
(ii) if the said supply is a Zero Rated Supply, then can the same be considered as an export of service under the GS T Act?
2. In point No.15 of the application regarding statement of relevant facts having a bearing on the question(s) raised, the applicant has stated the following are as under:
NES Global Specialist Engineering Services Private Limited (NES India) has its registered office is situated at office no 24 & 28, Red Bricks – Level 1, HDIL Kaledonia, Sahar Road, Andheri East, Mumbai -400069, Maharashtra, India.
The Company is engaged in providing supply of man-power services to hi

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uld be as following, for example:
Accounting, Sales Invoicing, Purchase invoicing, Cash receipt posting, Bank Payment entries, Other receipt entries, Credit Control work, Support Assignment work, Payroll assistance, Storing and scanning of data to the data storage disk and any other work would be required by you as per your requirements. The applicant has mentioned that copy of the Master Services Agreement (MSA) is enclosed.
However the applicant has not submitted the Master Services Agreement (“MSA”) and its Schedules in detail.
3. The applicant has provided vide their letter dated 5.07.2018, as Exhibit-1, a draft Intercompany Services Agreement (“ISA”) with NES Global Talent Recruitment Services (NES Abu Dhabi) whose registered office is situated at Unit 104, Business Avenue Tower, AI Salaam Street, P.O. Box No.63107, Abu Dhabi.
The above mentioned draft agreement is only “Draft” and not final. Hence, this also is not a authentic document:-
4. In point No.16 of the application

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service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange, and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8
The applicant mentioned that they fulfil all the conditions.
FINDINGS
5. The basic issue to be decided in the application is to:-
(i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act?
(ii) If the said supply is a Zero Rated Supply, then can the same be considered as an export of service under the GST Act?
6. The applicant in Point No.15 of the application have stated that NES India and NES Abu Dhabi have proposed to enter into a service agreement through which NES India will provide support service in respect of the foreign business carried on by NES Abu Dhabi. Every service

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mentioned draft agreement is only “Draft” and not final. Hence, this also is not a authentic document.
7. To consider the transaction between NES India and NES Abu Dhabi as “Export of Service” following conditions as per provisions of Section 2(6) of GST Act are to be fulfilled,-
i) the supplier of service is located in India;
ii) the recipient of service is located outside India;
iii) the place of supply of service is outside India;
iv) the payment for such service has been received by the supplier of service inconvertible foreign exchange; and
v) the supplier of service and the recipient of service are not merely establishments of a distinct person.
In order to comply with the above conditions, the
1. copy of Master Services Agreement (“MSA”),
2. copy of Intercompany Services Agreement (“ISA”).
3. Shareholding Patterns & Management personnel of NES India
4. Shareholding Patterns & Management Personnel of NES Abu Dhabi are required.
5. The end to end details of transactio

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ces provided for Accounting, Payroll, Taxation etc., and any other work which would require to do as per the request.
The above details does not mention how each services will be provided, and what are the end to end transactions or details of each services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, the relationship of NES India and NES Abu Dhabi as to why they are not merely establishment of distinct persons etc.
Since, the above mentioned agreement and details are not provided, this office is not in a position to reply to above questions of the applicant.
In view of the above, it appears that transaction between NES India and NES Abu Dhabi cannot be consider as Export of Service at this stage.
PRAYER
Considering the facts discussed in foregoing paragraphs, the question framed by the applicant in Point No. 14,
(i) Whether the transaction in question is a Zero Rated Supply or a No

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e following details were not submitted by the applicant.-
1. copy of Master Services Agreement (“MSA”),
2. copy of Intercompany Services Agreement (“ISA”).
3. Shareholding Patterns & Management personnel of NES India
4. Shareholding Patterns & Management Personnel of NES Abu Dhabi are required.
5. The end to end details of transactions, nature of services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, the relationship of NES India and NES. Abu Dhabi as to why they are not merely establishment of distinct persons etc.
2.1) The above information is insufficient to understand as to how each services will be provided, and what are the end to end transactions or details of each services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, the relationship of NES India and NES Abu Dhabi as to why they

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4) Further the details of share holding pattern and Key Personnel of NES India shows that 9,999 share are with NES Global Ltd. UK and one share is with NES International Ltd., UK. There are four Directors in The company viz. Stephen William Buckley, Coleman Lee Fraser, Coton Simon Francis, Babu Sebastin. In case of NES Abu Dhabi 51% share are hold by Mr.Khaled Mohmmad Abdulaziz Alshareef Alhashmi and 49% are hold by NES Globle Ltd, UK. They have 6 Directors viz. Mr.Darren Grainger Managing Director Middle East, Mr.Vikram Nanda Regional Director Operation, Mr.Ronan Kelly Regional Finance Director – Middle East, Mr Sultan Mohamed Operation Manager, Mr. Narayan Devadiga, Regional Finance Manager & Mr. Ashish Poduval, Regional Payroll Manager. It shows that both companies have different Key Management Personnel, and Board of Directors and neither the company hold shares of each other and hence both the companies are independent of each other. Regarding citation mentioned above, all the ci

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ransactions or details of each services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, in spite of Advance Ruling Authority directing the applicant to handover supporting documents.
5) We can neither presume or conjuncture nor can we commit anything merely on the basis of nomenclature of the services. In absence of full disclosure/information, if we indicate it is an export of services, ITC benefits, refund and other unknown implications may wrongly arise.
Since, the above mentioned details/information are not provided, this office is not in a position to reply to below questions of the applicant.
QUESTION & PRAYER
Considering the facts discussed in foregoing paragraphs, the question framed by the applicant in
Point No.14,
(i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act? the answer is since the applicant failed to provide the Master

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rovision of service, the place of recipient of service, the place of provider of services, it is prayed that the application may be rejected at this stage.
Therefore, the applicant may be directed to provide complete information as stated in foregoing paras above.
04. HEARING
The Preliminary hearing in the matter was held on 07.08.2018, as nobody was present from applicant's side. Jurisdictional Officer Ms. Shobha Parde, Division – VI, Range – IV, Mumbai East Commissionerate appeared and stated that they would making submissions at the time of final hearing. Next Preliminary hearing in the matter was held on 12.09.2018 Sh. Ravidram. P .M. C.A. appeared and requested for admission of application as per contentions in their application. Jurisdictional Officer Ms. Rashmi Nakashe, Suptt., Division – VI, Range – IV, Mumbai East Commissionerate appeared and stated that they will make submissions in due course in addition to submissions made today.
The application was admitted and cal

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th April, 2017. The services to be provided by the applicant to the client as per the MSA would be as under:-
1. Purchase Invoice Bookings for various Costs such as Visa, Immigration, labour cancellation charges, Medical expenses of various contractors of NES Abu Dhabi.
2. Invoices Booking for all overheads.
3. Creating Invoices to various clients.
4. Booking Expenses of Contractors.
5. Bank Reconciliation of all Bank accounts.
6. Vendor Reconciliation for all Vendors.
7. Cash Receipt entries posting.
8. Bank Payment entries posting,
9. AR reporting:
10. Payroll Assistance.
11. Support Assignment work.
12. Scanning and storing the data in the shared folder of NES Abu Dhabi.
13. General Consultancy Services provided for Accounting, Payroll, Taxation etc., and any other work which would require to do as per the request.
2). The relevant portion of the agreement is reproduced as below for the sake of clarity of activities & transactions undertaken by the applicant whether it

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exure A for detailed Service Schedule.
3.3. NES India will provide general advice and assistance in relation to the Services, as required, from time to time. These will be charged on a time and costs basis, according to NES India's standard rates. Such consultancy services will be provided with NES India's prior consent and at mutually agreeable dates and times,
5.1. NES India will charge to NES Abu Dhabi the cost incurred for providing the Service with a margin of 10% plus taxes applicable during the period.
3). We find from the agreement that the services being provided to their client is in the form of Administrative and support services. It is further seen from the clause no.3.3 that NES India will provide general advice and assistance in relation to the Services, as required, from time to time and such services will be charged on a time and costs basis.
Considering the facts and various documents produced before us, we find that the applicant's transaction is in th

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that the payment for such service has been received by the supplier of service in convertible foreign exchange, and for that copies of invoices, BRC and Bank statements are submitted on record which proves that the payment received is in convertible foreign exchange. We further find from the information submitted on record that both the Applicant and their client are not establishments of the same person, even though they are group companies. The Shareholding pattern of both the companies proves that the Key management personal and Board of Directors are different and neither of them holds shares of each other and thus they do not control one another. The applicant is not a branch or an agency or a representational office of the client and both the companies are independent of each other. Thus from the foregoing we find that the clause no. (i),(ii), (iv),and ( v) of Section 2(6) of the IGST Act, are fulfilled by the applicant.
Now we will discuss whether condition no. (iii), related t

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meaning that the agreement does not intend to create relationship of principal and agent. Thus we find that applicant is not a person who arranges or facilitate supply of services between two or more persons and therefore the proposed service would not fall to be classified as 'intermediary service'.
We find from the details as given in the application and submissions before us, record, that supplier of service i.e. applicant is located in India, the recipient of service i.e. AM is located outside India -Abu Dhabi; payment is received in convertible foreign exchange, the supplier of service and the recipient of service are not merely establishment of a distinct person and applicant not being an intermediary and services are not specified in sub-section (3) to (13) of section 13, the place of supply of service would be the location of the recipient of services i.e.
NES Abu Dhabi, which is outside India. As the applicant satisfies all the ingredients of 'export of services&

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In Re: M/s. Allied Digital Services Ltd.
GST
2019 (3) TMI 539 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (22) G. S. T. L. 556 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 19-12-2018
GST-ARA- 90/2018-19/B-159
GST
SHRI B. TIMOTHY, AND SHRI B. V. BORHADE, MEMBER
PROCEEDINGS
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as ''the CGST Act and MGST Act”] by Allied Digital Services Ltd, the applicant, seeking an advance ruling in respect of the following questions:
Question 1 :- Whether the amount received for supply of services during the post GST period to the Government of Maharashtra (Home Department) as per the contract in question are taxable under SGST/CGST Act ?
Q

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-Chinchwad (hereinafter referred to as the “Surveillance Project”).
2. The GOM published the Request for proposal (for sort' RFP') to seek services of a reputed IT firm as a System Integrator for Design, Development, Implementation & Maintenance of CCTV based Surveillance System For Pune and Pimpri-Chinchwad areas. Accordingly the Applicant, has submitted its proposal for the same.
3. The GOM has selected the Applicant as successful bidder and issued Letter of Intent dated 17th September 2013 to the Applicant, the Applicant in turn signed and returned the same as a token of acceptance of Letter of Intent.
4. Therefore the agreement dated 28th day of October, 2013 is made between the Home Department of GoM and the Applicant. The Applicant is referred to as 'Systems Integrator” or 'SI” in the contract document.
5. The Applicant has certain queries regarding the applicability of GST tax on the payments made by the GoM to the Applicant under above stated contract.
6. T

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s would include feeds, analytics, information and all the other services rendered as per the scope of work and as per the SLAS.
(g) “Assets” refer to all the hardware / Software / furniture / data / documentations / manuals / catalogs / brochures / or any other material procured, created or utilized by the SI or the GOM for the Pune Surveillance Project.
3) Term of the Agreement
The term of this agreement shall be a period of 5 years and 10 months from the date of execution of this Agreement. This includes the estimated period of 42 weeks for implementation of the project and 60 months from the date of successful go live of the project.
4. Fees
Total fees to be paid to the Systems Integrator for the execution of this Contract are Rs. 2,24,31,50,105.50. GOM shall pay the Systems Integrator the total fees in following manner :
(a) 20% of the total fees against Project Go Live (i.e. successful FAT) and
(b) Remaining 80% of total fees in 20 equal installments (Rs. 8,97,26,004.22 /p

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e GOM dispute such invoice or part of it provided that such dispute is bonafide. The disputed amount shall be settled in Resolution of dispute.
6) Work Completion Timelines
List of the broad activities to be carried out by the Systems Integrator and the timelines from the date of work Order are given in the table below. “T” stands for the date of issue of the Work Order.
Sr.No.
Activity
Time Line
1.
Mobilization of Resources, Preparation of the Inception Report
T + 3 weeks
2.
Prepare the Detailed Technical Architecture of the Overall System in consultation with all the Stakeholders
T + 6 weeks
3
Prepare FRS for the video Surveillance Solution, Finalise Reporting Formats / Base Rules
T + 8 weeks
4
Prepare SRS, SDD for the Entire Video Surveillance System
T + 12 weeks
5
Supply, Installation, Configuration of various equipments, components, systems at Data Center
T + 18 weeks
6
Preparing and implementing the Surveillance system information security policy, Including

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16
Supply, Installation of Cameras for 2nd, 3rd & 4th Zones
T + 31 weeks
17
Development of the remaining viewing Centers, Supply & Installation of equipments at corresponding Police Stations
T + 26 weeks
18
Establishing connectivity for Phase II Cameras, viewing Center, Police Stations
T + 33 weeks
19
Training and Capacity Building for the Police Personnel for Phase II
T + 35 weeks
20
FAT for phase II Cameras, Viewing Center Setup, Police Station
T + 37 weeks
21
Go Live for the 2nd, 3rd & 4th Zones
T + 40 weeks
22
System Documents, User Documents as per ITIL (Information Technology Infrastructure Library) standards
T +41 weeks
23
formal Go Live for the Entire Project
T + 42 weeks
24
Operations and Maintenance post Go-live
5 years
Time is the essence of the agreement
7) Service Level Agreement (SLA)
GoM is looking at a very professional approach in the project implementation and its operations. System Integrator is expected to match these expectations of the

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.
c) Maintain 3% of installed camera quantity as spare inventory at all times, for an types of cameras.
d) Keep all the tangible Assets in good & serviceable condition (reasonable wear & tear excepted) &/or the intangible Assets suitably upgraded subject to the relevant standards as stated in of the RFP to meet the SLAs mentioned in the contract & during the entire term of the Agreement.
9) Provide a well-prepared documentation for users in the manual, a clear plan for training, education & hand holding the users & shall form part of hand holding phase until bringing up the users to use software solution with speed & efficiency.
h) To the extent that the Assets are under the control of the system Integrator, keep the Assets suitably housed & in conformity with any statutory requirements from time to time applicable to them.
j) Not, knowingly or negligently use or permit any of the Assets to be used in contravention of any statutory provisions or regulation or in any way contrary t

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architecture to provide efficient services to GOM of this project in an efficient and speedy manner.
q) Obtain a sign off from GOM or its nominated agencies at each stage as is essential to close each of the above considerations.
r) Ensure that the Mobile Vans mentioned in RFP shall be registered under the provisions contained u/s 39 of Motor Vehicle Act, 1988 in the name of GoM.
s) Follow/observe the conditions laid down under the provisions contained u/sub Section 2 of Section 149 of Motor Vehicle Act, 1988.
19) Date Ownership
All the data created as the part of the project shall be owned by GOM. The SI shall take utmost care maintaining security, confidentiality and backup of this data. Access to the data / systems shall be given by the SI only to the personnel working on the projects and their names & contact details shall be shared with GOM in advance. GOM / its authorized representative(s) shall conduct periodic / surprise security reviews and audits, to ensure the complianc

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employees assigned by System Integrator to perform the services shall be employees of System Integrator and/or its subcontractors, & under no circumstances will such personnel be considered as employees of GOM. System Integrator shall have the sole responsibility for supervision & control of its personnel & for payment of such personnel's employee's entire compensation, including salary, legal deductions withholding of Income taxes & social security taxes, worker's compensation, employee & disability benefits & the like & shall be responsible for all employer obligations under all laws as applicable from time to time. The GoM shall not be responsible for the above issues concerning to personnel of System Integrator.
ii. System Integrator shall use its best efforts to ensure that sufficient System Integrator personnel are employed to perform the Services, & that, such personnel have appropriate qualifications to perform the Services. GOM or its nominated agencies shall have

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matter.”
7. From the schedule forming part of the contract it is clear that the entire project cost, as per the contract is at Rs. 224,31,50, 106/ The goods used in the project that is capital cost of the project is at Rs.,90,35,70,545/-; and the balance operation cost for 5 years of the entire project which is a 133,95,79,561/
8. As per the contract the project went “Go Live” on 27th October 2015. This shows that the project was operational in all respect on or before 1st July 2017 i.e. before the GST regime.
9. As per the contract the ownership of the assets that is hardware/software/funiture/data/documentation/manuals/catalogue/broachers / or any other material procured, created or utilised by the applicant will be transferred to the GOM on the date of “Go Live”. The Project went live on 27th October 2015 and hence, as per the contract, all the Assets of Rs. 90,35,70,545/-(Rupees Nine Thousand Thirty Five Lakhs Seventy Thousand Five Hundred Forty Five Only) are transferred on 16

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ry fee for this application of Rs. 5000/- (Five Thousand only).
14. The Copy of the contract along with the Schedules forming part of the contract are annexed herewith for ready reference.
15. According to us the contract in question is a composite supply of works contract as defined in the clause 119 of section 2 of the CGST Act and hence it will be liable for tax @6% under the CGST Act as well as under the SGST Act.
16. Considering the above facts and circumstances the applicant raises the following questions before the honorable Advance Ruling authority for its kind consideration and decision
Question 1:- Whether the amount received for supply of services during the post GST period to the Government of Maharashtra (Home Department) as per the contract in question are taxable under SGST/CGST Act ?
Question 2:- If answer to the question No. 1 is in affirmative then what is the rate of tax under SGST/CGST?
The Appellant prays to decide the above questions.
03. CONTENTION – AS PE

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rnment of Maharashtra has issued letter to the Applicant for Final; Acceptance Certificate for Design, Development, Implementation & Maintenance of CCTV based Surveillance System for Pune & Pimpri-Chinchwad and declared the project GO LIVE from The issuance date of letter on 27 October 2015.
The Applicant has submitted invoices dt. 25 July 2017, dt. 26 October 2017, dt.25 January 2017 of Pune city Surveillance Project as per agreement dt.28 October 2013 to the Government of Maharashtra by levying tax under CGST – 9% and SGST- 9%. by way of notification no.20/2017 dtd. 22/08/2017. Thereafter the Applicant also submitted invoices dt. 25 April 2018 and dt. 25 October to the Government of Maharashtra by levying tax under CGST -6% and SGST- 6%. by way of notification no 46/2017 dtd.14/11/2017.
In the Advance Ruling Application para no. 15 the applicant has mentioned that the contract in question is a composite supply of works contract as defined in the clause 119 of section 2 of the CGST

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18) New Delhi, the 28th June,2017 the tax rate is SGST- 9% & CGST- 9%)
04. HEARING
The Preliminary hearing in the matter was held on 05.12.2018, Sh. Prakash Shah, Director, Sh. Vijay Walunj, Authorized signatory,Sh. Pradeep Rawal, Manager Accounts Finance, along with Sh. V. V. Guthe, Advocate appeared and made oral and written submissions and stated that they have made full submissions and they do not need final hearing in the matter. They requested to take decision on records submitted. Jurisdictional Officer Sh. S. V. Sawant, Dy. Commr. of S.T.(E-806), Nodal I, Mumbai appeared and made oral and written submissions. We were heard from both the sides.
05. OBSERVATIONS
We have carefully gone through the facts of the case, oral and written submissions made by the applicant as well as the jurisdictional officer and the relevant provisions of the GST law In this regard.
The Government of Maharashtra has awarded contract to the applicant to render services of system integrating design,

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not, and the applicable rate of duty can be determined.
To determine the nature of activity of the applicant it is required to be determined whether the contract involves composite supply as defined under the SGST/CGST Act and further whether such supplies constitute a Works Contract as defined in clause (119) of section 2 of the GST Act.
We would now look at relevant clauses of the agreement to understand the exact nature of the transaction envisaged by the said agreement which we have already reproduced in para 2 pertaining to the facts and contention of the applicant.
The perusal of clauses of the agreement leads us to the following inferences:-
1) The agreement clearly mentions that the applicant firm is responsible for design, development, implementation and maintenance of CCTV based surveillance system.
2) As per the contract there is single price payable in prescribed manner.
3) The ownership of the Assets shall vest with GOM.
4) IPR of the customized solution would belo

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on with each other in the ordinary course of business, one of which is a principal supply;
Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply”
As a corollary of above finding, the next issue to be decided by us is whether this composite supply is 'Works Contract' as defined in clause (119) of section 2 of the SGST/CGST Act.
Section 2(119) reads: “works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;”
Works contract is essentially a contract of service which may involve supply of goods in the execution of the said contract. Howev

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= 2004 (5) TMI 77 – SUPREME COURT OF INDIA.
We can now look at how the judgment has been delivered –
“8. In their reply to the show-cause, the respondents explained the processes involved, the manner in which the equipments were assembled and erected as also their specifications in terms of volume and weight. It was explained that the function of the drilling machine is to drill hole in the blast furnace to enable the molten steel to flow out of the blast furnace for collection in ladles for further processing. After the molten material is taken out of the blast furnace, the ''hole, in the wall of the furnace has to be closed by spraying special clay. This function is performed by the mudgun which is brought to its position and locked against the wall for exerting a, force of 240-300 tons to fill up the hole in the furnace. The blast furnace in which the inputs are loaded is a massive vessel of 1719-cubic-metre capacity and the size of its outer diameter is 10.6 metres, and

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hich are similar to huge pillars. This fabrication activity takes place in the cast house floor at 25 feet above ground level. After welding the columns, the base plate has to be secured to the concrete platform. This is achieved by getting up a trolley way with high beams in an inclined posture so that base plate could be moved to the concrete platform and secured. The same trolley helps in the movement of various components to their determined position. The various components of the mudgun and drilling machine are mounted piece by piece on a metal frame, which is welded to the base plate. The components are stored in a storehouse away from the blast furnace and are brought to site and physically lifted by a crane and landed on the cast house floor 25-feet high near the concrete platform where drilling machine and mudgun have to be erected. The weight of the mudgun is approximately 19 tons and the weight of the drilling machine approximately 11 tons. The volume of the mudgun is 1.5 *

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antled into parts and brought down to the ground only by using cranes and trolley ways considering the size, and also considering the fact that there is no space available for moving the machines in assembled condition due to their volume and weight. She found support for her conclusion in the decision of this Court in Municipal Corpn. of Greater Bombay v. Indian Oil Corpn. Ltd. [1991 Supp (2) SCC 18] =  1990 (11) TMI 407 – SUPREME COURT and held that the twin tests laid down by this Court to determine whether assembly/erection would result in immovable property or not were fully satisfied in the facts of this case. She concluded:
“The test laid down by the Supreme Court is that if the chattel is movable to another place as such for use, it is movable but if it has to be dismantled and reassembled or re-erected at another place for such use, such chattel would be immovable. In the present appeal, even according to the finding of the Collector, mudguns and tap hole-drilling machi

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city of about 30 tons per square metre. It is assembled at site in different sections and consists of bottom plates, tanks, coils, drive frames, supports, plates, etc. The aforesaid parts were cleared from the premises of the appellants and the mono vertical crystalliser was assembled and erected at site. The process involved welding and gas-cutting. After considering the material placed on the record it was held that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation at the site of the sugar factory, it is not capable of being sold as it is, without anything more. This Court, therefore, concluded that mono vertical crystallisers are immovable property and hence not “goods” within the meaning of the Act and, therefore, not exigible to excise duty.
In Triveni Engg. & Industries Ltd. v. CCE [(2000) 7 SCC 29: (2000) 120 ELT 273] = 2000 (8) TMI 86 – SUPREME COURT OF INDIA a question arose regarding excisability of turbo alternator. In the

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urt observed: (SCC pp. 35-36, para 14)
“14. There can be no doubt that if an article is an immovable property, it cannot be termed as 'excisable goods' for purposes of the Act. From a combined reading of the definition of 'immovable property' in Section 3 of the Transfer of Property Act, Section 3(26) of the General Clauses Act, it is evident that in an immovable property there is neither mobility nor marketability as understood in the excise law. Whether an article is permanently fastened to anything attached to the earth requires determination of both the intention as well as the factum of fastening to anything attached to the earth. And this has to be ascertained from the facts and circumstances of each case.”
42. So also in T.T.G. Industries Ltd. v. CCE[(2004) 4 SCC 751 : (2004) 167 ELT 501] =  2004 (5) TMI 77 – SUPREME COURT OF INDIA, the machinery was erected at the site by the assessee on a specially made concrete platform at a level of 25 ft height. Cons

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ble as they were at the time of their purchase. Once such a machine is fixed, embedded or assimilated in a permanent structure, the movable character of the machine becomes extinct.
As can be understood from the above judgements, the Honourable Courts have evolved the term 'immovable property' when faced with the question of what constitutes movable and lmmovable property. Though not issued for the purposes of the GST Act, the rules laid down by the Courts in the above judgments can be applied in order to differentiate immovable property from the movable property.
Thus, it can be seen that the Hon. Supreme Court held those machines to be immovable property when they cannot be shifted without first dismantling it for re-erecting it at another site. In the instant case CCTV cameras are permanently fastened to the street lighting poles which are not intended to be removed but to provide surveillance to police authorities on a real time and continuous basis to control criminal ac

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is involved in the execution of the contract and thus the 'Surveillance Project' is a works contract as defined in Sub-section 119 of Section 2 of the GST Act and is supply of services as per 6(a) of Schedule II of the GST Act. And therefore the amount received for the supply of services post GST are taxable under the provision of GST Act.
Question No. 2: Having answered the question No.1 in the affirmative, then the rate of tax applicable under GST Act is determined as under:
While dealing with Que no. 1 above, we have drawn a conclusion that the applicant is supplying works contract services, we now reproduce the Notification no.11/2017 – Central Tax (Rate) dated 28/06/2017 which is applicable to the present case.
SI.No.
Chapter, Section or Heading.
Description of Service
Rate (per cent.)
Condition
1
2
3
4
5
 
Chapter 99
All Services
 
 
Section 5
Construction Services
 
 
Heading 9954 (Construction services)
(i) ……….

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iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act,2017, supplied to the Government, ………….. alteration of, (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);(b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply(ii) water treatment, or (iii) sewerage treatment or disposal.
6
–
 
 
(iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, ………….. of – (a) a road, bridge, tunnel, or terminal ; (b) a civil structure-…….. under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a civil structure-……….. under the Housing for All (Urban) Mission/Pradh

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r:-
SI.No.
Chapter, Section or Heading.
Description of Service
Rate (per cent.)
Condition
1
2
3
4
5
 
Chapter 99
All Services
 
 
 
Section 5
Construction Services
 
 
 
Heading 9954 (Construction services)
(i) ………………………………)
9
–
 
 
(ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017.'
9
–
 
 
(iii) Composite supply of works contract ………………….
6
–
 
 
(iv) Composite supply of works contract ……………….
6
–
 
 
(v) Composite supply of works contract as 6 defined in clause. (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of ORIGINAL WORKS pertaining to, (a) railways, excluding monorail and metro…………..
6
–
 
 
(vi)Services p

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g.
Description of Service
Rate (per cent.)
Condition
1
2
3
4
5
 
Chapter 99
All Services
 
 
 
Section 5
Construction Services
 
 
 
Heading 9954 (Construction services)
(i) ………………………………)
9
–
 
 
(ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017.'
9
–
 
 
(iii) Composite supply of works contract ………………….
6
Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority as the case may be
 
 
(iv) Composite supply of works contract ……………….
6
–
 
 
(v) Composite supply of works contract as 6 defined in clause. (119) of section 2 of the Central Goods and Services Ta

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upplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority as the case may be
 
Notification 31/2017 Dt.13.10.2017
“(vii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity.
2.5
Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority as the case may be
 
Notification 31/2017 Dt.13.10.2017
(viii) Composite supply of works contract

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ed in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity
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Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be.
(x) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a subcontractor to the main contractor providing services specified in item (vii) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity.
2.5
Provided that where the services are supplied to a

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ply of works contract in respect of surveillance project to Government of Maharashtra but the reduced rate of tax is available only if the work is of the type of original work. The expression 'Original work' has not been defined under any of the Notifications applicable to the present case. The expression 'original work' has assigned meaning under the CPWD Works Manual 2014 which reproduced as below:
1.3.1 Original Works
These shall mean:-
(i) all new constructions,
(ii) all types of additions, alterations and/or special repairs to newly acquired assets, abandoned or damaged assets that are required to make them workable.
(iii) major replacements or remodeling of a portion of an existing structure or installation or other works, which results in a genuine increase in the life and value of the property.
Thus' Original Works' would mean ; all new constructions; all types of additions and alterations to abandoned or damaged structures on land that are require

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