Goods and Services Tax

Shri Ravi Charaya, Shri Chandranath Sarkar, Shri Shreepad Shende, Shri Jayasankar Venkatramani Versus M/s Hardcastle Restaurants Pvt. Ltd.
GST
2018 (11) TMI 1073 – NATIONAL ANTI-PROFITEERING AUTHORITY – 2018 (19) G. S. T. L. 511 (N. A. P. A.)
NATIONAL ANTI-PROFITEERING AUTHORITY – NAPA
Dated:- 16-11-2018
Case No. : 14/2018
GST
Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member, Ms. R. Bhagyadevi, Technical Member And Sh. Amand Shah, Technical Member
For The Applicant : Sh. Akshat Aggarwal Assistant Commissioner and Sh. Bhupender Goyal Assistant Director (Costs)
For The Respondent Sh. Suresh Lakshminarayan, Chief Finance Officer, Sh. Dinesh Agarwal, CA and Sh. Mayank Jain, Advocate from M/S Khaitan & Co
ORDER
1. This report dated 15.06.2018 has been received from the Applicant No. 5 i.e. the Director General of Safeguards (DGSG), now re-designated as Director General of Anti-Profiteering (hereinafter referred to as the DGAP) under Rule 129 (6) of

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r Rule 129 (1) of the CGST Rules, 2017.
3. The DGAP had called upon the Respondent to submit reply on the allegation levelled by the Applicants No. 1 to 4 and also to suo moto determine the quantum of benefit which he had not passed on to the consumers during the period between 15.11.2017 to 31.01.2018. The above Applicants were given an opportunity to inspect the non-confidential evidences/reply furnished by the Respondent between 24.05.2018 to 25.05.2018. However, the Applicants did not avail of this opportunity.
4. The Respondent had submitted his reply on 05.01.2018 vide Annexure11 and denied the allegations levelled against him and claimed that the benefit of reduction in the rate of tax had been neutralised due to withdrawl of Input Tax Credit (ITC) to him. The Respondent had furnished the required information/documents to the DGAP vide his letters dated  12.01.2018, 17.01.2018, 22.01.2018, 24.01.2018, 29.01.2018,  07.02.2018, 09.02.2018, 16.02.2018, 22.02.2018, 23.02

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e food and the beverages published by him for each tier of restaurants clearly show that prior to 15.11.2017, the GST was being charged @ 18% and w.e.f. 15.11.2017 it had been levied @ 5% on the taxable value and thus, the
commensurate benefit arising out of the reduction in the rate of tax had been passed on to the customers.
c. That the price revision made by him w.e.f. 15.11.2017 did not fall within the purview of Section 171 of the above Act as this provision applied in only those cases where the contract of supply/sale had been entered in to prior to the change in the rate
of tax or ITC. He has also claimed that any such change did not amount to automatic change in the price unless it was agreed to by both the parties as per Section 64 A of the Sale of Goods Act, 1930. He has further claimed that any attempt to regulate the sale price of the products being sold by him would violate his right to carry on trade as per Article 19 (1) (g) of the Constitution and the provisions o

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aurants in the shopping malls was charged on fixed or variable or semi-variable basis which was approximately 3.5% of the incremental turnover and was payable at the end of the year and since the bills for the same would be raised only at the year-end, he would not be eligible to claim ITC on such variable rent and he would suffer an estimated loss of Rs. 22.78 Lakhs.
f. That for the computation of availability of ITC, additional ITC for the period from July, 2017 to 14.11.2017 should be a minimum of Rs. 10 Crores. The Respondent has also claimed that the transitional credit mentioned in TRAN-I statement filed by him was not the correct indicator of the tax incurred as (i) credit of CENVAT was not available on the Central Excise Duty, (ii) his restaurants were operating under the Composition Scheme under which ITC on VAT was not allowed (iii) expenses on Petroleum were outside the GST and (iv) most of the inputs were taxable at higher rates. He has further claimed that he had reverse

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limited to the extent of ensuring that the benefits of tax reduction and ITC were passed on to the consumers by way of commensurate reduction in the prices. The DGAP has further stated that the Central Govt. on the recommendation of the GST Council vide it's Notification No. 26/2017-Central Tax (Rate) dated 14.11.20171 had reduced the rate of tax on restaurant services from 18% to 5% w.e.f. 15.11.2017 with the condition that the benefit of ITC would not be available on this service.
7. The DGAP has also submitted that the Respondent was selling 1,844 products and after comparing the price lists published before and after 15.11.2017 when the rate of tax was reduced, which was indicated in Annexure-32, the Respondent had increased the base price in respect of 1,774 (96.20%) products. He has further submitted that although the Respondent had charged GST @ 5% on and after 15.11.2017 but due to increase in the base price the customers were forced to pay the same price which was being c

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shown in the GSTR3B, which has been adjusted by adding the amount of ITC which was availed in the month of November, 2017 as per GSTR-3B return and by excluding the amount of tax which was paid on inter unit branch transfers as per sale registers and the input tax credit pertaining to the period before July 2017 which was availed during the period between July, 2017 to October, 2017 as per the GSTR-3B returns. The amount of ITC pertaining to the period before 01.07.2017 which was availed during July to October, 2017 was also excluded.
9. The DGAP has also mentioned that the Respondent had claimed that the ITC of Rs. 9.33 Crores approx. availed in November, 2017 and subsequently was on account of the invoices issued during the period of July, 2017 to October, 2017 and for ITC of Rs. 0.72 core, the invoices were not in the possession of the Respondent. The DGAP has intimated that out of the above claim, ITC of Rs. 8.51 Crores pertaining to the invoices issued from July, 2017 to October

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pplied by the Respondent during the same period excluding the inter-unit branch transfers. The rate of tax on the restaurant services was reduced from 18% to 5% w.e.f. 15.11.2017 and the benefit of ITC was not available to the Respondent w.e.f. the above date. The DGAP has calculated the ratio of denial of ITC as under:-
11. On the basis of the analysis of the details of the item-wise outward taxable supplies made during the period between 15.11.2017 to 31.01.2018, the DGAP had found that the Respondent had increased the base prices of the various items supplied by him to neutralise the effect of denial of ITC after the rate reduction. The DGAP had compared the pre and post GST rate reduction prices of the items sold during the period between 15.11.2017 to 31.01.2018 and after taking into account the entire quantity of the products sold during the above period, had found that the Respondent had increased the average output taxable value i.e. the base price by 10.45% to offset the deni

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avened the provisions of Section 171 of the above Act:-
S. No.
State (Place of Supply)
Profiteering (In Rs.)
1
Andhra Pradesh
8,36,602
2
Chhattisgarh
3,99,904
3
Goa
8,29,314
4
Gujarat
88,48,919
5
Karnataka
1,18,30,563
6
Kerala
13,34,341
7
Madhya Pradesh
9,68,540
8
Maharashtra
3,96,68,520
9
Tamilnadu
43,19,803
10
Telangana
58,91,280
Total:
7,49,27,786
13. The above report was considered by the Authority in its sitting held on 05.07.2018 and it was decided to hear the interested parties by granting hearing on 24.07.2018 during which the Applicants No. 1 to 4 did not appear. The DGAP was represented by Sh. Akshat Aggarwal Assistant Commissioner and Sh. Bhupinder Goyal Assistant Director (Costs). Sh. Suresh Lakshminarayan, Chief Finance Officer, Sh. Dinesh Agarwal, CA and Sh. Mayank Jain, Advocate from M/S Khaitan & Co. appeared for the Respondent.
14. The Respondent has filed detailed written submissions on 24.07.2018, 09.08.2018, 16.08.2018 and 22.08.

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to the computation of base price by invoking the marginal note, i.e. “Anti-Profiteering Measure” which was illegal. He has further claimed that as per the settled law pronounced on the interpretation of the statutes, marginal notes were considered as internal aid to construction and while construing such provisions, the first and the foremost rule was of literal construction and in case the provision was unambiguous and the legislative intent was clear, the other rules of construction were not be called into aid since they were to be called for aid only when the legislative intention was not clear. The Respondent has also cited the law settled in the cases of Commissioner of income Tax v. Calcutta Knitwears (2014) 6 SCC 444, Union of India v. National Federation of the Blind (2013) 10 SCC 772, Commissioner of Income-Tax v. Ahmedbhai Umarbhai & Co. 1950 AIR 134, N. C. Dhoundial v. Union of India AIR 2004 SC 1272, Sarabjit Rick Singh v. Union of India 2008 (2) SCC 417 and R. Krishnaiah v

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onary
The Respondent has also contended that the DGAP had only considered the impact of ITC denial and had failed to consider other factors such as increase in the electricity bills, fuel costs, variable rent, royalty and commissions etc. He has further contended that as per WPI, prices of food articles had risen by 6.32% and that of fuel & power by 4.69% during the same period, however, only the impact of ITC was considered. The Respondent has also claimed that the increased input prices were considered as a mitigating factor in the order dated 4 May 2018 passed by this Authority in the case of Kumar Gandharv v. KRBL Limited, but in spite of furnishing evidence no other factor was taken in   to consideration. He has further claimed that while determining cost of a product, tax was just one component and the other factors had been ignored and therefore, the entire exercise undertaken by the DGAP needed to be dismissed as the DGAP had lost sight of the true meaning of the wor

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butable solely to the price increase. He has further pleaded that on the incremental revenue of 24,81,33,857/-, he had incurred incremental cost of 2,21   hence the profit worked out to be 9.43% as against 10.45% computed by the DGAP as per the following table:-
 
DESCRIPTION
 
AMOUNT IN e
AMOUNT IN
A
Revenue for 15 November to 31 January 2018 on price before revision
 
237,46,157
 
B
Revenue for 15 November to 31 January 2018 on after price revision
 
262,28,18,014
 
C
Incremental revenue due to price revision [B – A]
 
 
24,81,33,857
D
incremental royalty due to price revision [3.99% x C]
3.99%
99,00,541
 
 
E
Incremental rent due to price revision [3.29% x C]
3.29%
81,63,604
 
 
F
Other expenses due to price revision [0.96% x C]
0.96%
23,82,085
 
 
G
Incremental tax cost [(D+E+F) x 18%]
 
36,80,321
 
 
H
Total incremental cost due

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or unreasonable profit as he was hardly making a profit, as the tax incremental cost computed by the DGAP was 9.11% as against the incremental price margin of 9.43%. and hence he had benefited only by 0.32%. He has also averred that the increased tax cost warranted revision in the prices to offset the tax cost and in case he increased the prices by ? 100, he would only get 00.28 after paying out royalty, variable rent and the outside services and therefore, the prices must be at least increased by 10.09% [9.11*100/0.902] and not 9.11% as had been calculated by the DGAP to recover the tax cost. He has further averred that the profiteering had to be due to excessive profit which was not the case in the present proceedings as the increased realisation was extremely minuscule, and therefore, the inevitable conclusion was that he had passed on the commensurate benefits and he had not violated the provisions of Section 171 of the CGST Act, 2017.
18. The Respondent has also stated that the

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7 to October 2017 being 12.28% should be considered for evaluating impact on cost due to denial of ITC. The Respondent further submitted that he had provided complete details of the ITC which he had availed in the months of December 2017 till March 2018 for the supplies received during the period between July – October 2017 which worked out to be 1,15,88,010/- which had been disallowed by the DGAP causing huge disadvantage to him. He has also claimed that the DGAP had disallowed ITC of 85,27,917/- pertaining to period prior to July 2017 but availed of during the period between July-October 2017 as the invoices were issued by the supplier late which must be given to him. He has further claimed that the GST liability on variable rent would be accounted for either on a monthly or yearly basis, although it was accruing daily which constituted 3.29% of the restaurant turnover which the Respondent would be denied.
19. The Respondent has also pleaded that during the period between JulyOctobe

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the Respondent to compute the taxable turnover for the period between 1 November 2017 – 14 November 2017. The Respondent has claimed that he had supplied the ITC Register w.e.f. 01.07.2017 to 30.11.2017 on 19.01.2018 and 22.03.2018, the Stock Statement as on 30.06.2017 and 14.11.2017 on 09.03.2018 and the details of the Stock Keeping Unit (SKU) wise sales w.e.f. 01.11.2017 to 14.11.2017 and 15.11.2017 to 30.11.2017 on 10.04.2018 and hence the allegation of not providing these details was incorrect. He has further claimed that perusal of Annexure 36 (Columns G & H and J & K) and Annexure 37 (Columns I & J and L & M) of the Report framed by the DGAP provided SKU wise turnover in terms of units and price for the period between 01-14 November and for the period of 15-30 November 2017 and hence the above allegation was wrong. He has also asserted that if the period of investigation was considered as 01 July 2017 to 14 November 2017, the tax cost resulting from denial of ITC would jump to 10

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ease in recovered price due to increase in sales prices
9.43%
9.43%
Impact due to denial of ITC
12.24%
10.10FIO.3
Net marginal Gain/(Loss)
(2.81%)
(0.6T0.87%)
21. He has also argued that the calculation of the profiteered amount of Rs. 7.49 Crores was not correct as the DGAP has ignored the reduction in the price made by him which had led to reduction in the profiteered amount and also due to the reason that the DGAP had calculated the profiteered amount @ 105%, i.e. base price + 5% GST when the 5% GST had already been deposited in the Government account and not retained by him and hence, no profiteering could be alleged. He has also admitted that on the basis the above submissions, the amount of alleged profiteering stood reduced to Rs. 3, 17,03,988/-.
22. The Respondent has also contended that the relevant provisions of the CGST Act, 2017 or the CGST Rules, 2017 did not prescribe the methodology to be followed by the registered suppliers in order to comply with the anti-pro

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egate it's authority under a statute without appropriate guidelines as per the law pronounced in the case of Indian Aluminium Co. Ltd. and Anr. v. The State of Bihar and Ors. 1994 (1) PLJR as the antiprofiteering provisions placed an unbridled discretion in the hands of the Authority and hence the present proceedings were not maintainable.
23. The Respondent has also stated that it was not clear whether the price alteration was required to be done at the entity level, State level, locational level, product level, category level or SKU level, each of which would bring about a different result in the pricing. There was also no indication whether a “commensurate” change in pricing would be assessed as a trend or in percentage terms. He has further stated that there was no recognition of various non-GST factors like market conditions, demand and supply, rising/ falling input costs, each of which might independently warrant a reduction or increase in prices and how in respect of common

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before 14 November 2017 but accounted in the books of account on or after 14 November 2017, he should be allowed to avail the same. He has further stated that he was barred from taking benefit of ITC on inward supplies received after 14 November 2017 as per Section 12 and 13 of the CGST Act, 2017 which could not be construed as curtailing his vested right of availing the ITC for the inward supplies received on or before 14 November 2017. He has also cited the cases of (i) Eicher Motors Ltd. v. Union of India 1999 (1) SCR 295 (ii) Samtel India Ltd. v.Commissioner of Central Excise (2003) 11 SCC 324 and (iii) Binani Cement Ltd v. Commissioner of Central Excise 2002 (143) E.L.T. 577 (Tri. – Del.) in his support.
25. The Respondent has also alleged that the DGAP had claimed that since the gross price has remained identical for the period up to 14 November 2017 and w.e.f. 15 November 2018 therefore, he had resorted to profiteering however, It was an undisputed fact that the Respondent had

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credit of Rs. 5,18,17,311/- was also required to be included in the month of July 2017 as per the comments dated 09 August 2018 of the DGAP for working out the ratio of ITC versus the taxable turnover which would then be 10.50% and hence he cannot be held to have profiteered.
27. The Respondent has also submitted that the DGAP had claimed that as per Section 171 determination of profiteering was required to be done in absolute terms, then the entire investigation was vitiated as it had been done on aggregate or consolidated data and the DGAP should have determined each and every factor against each and every product for determining profiteering. The respondent has also calculated the ratio of denial of ITC a under:-
He has also claimed that the net effect of the denial of ITC was 10.27% to 12.24% whereas the net incremental revenue was only 9.43% and hence   there was no profiteering.
28. The DGAP in his replies dated 08.08.2018 and 20.08.2018 filed in response to the subm

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er-October, 2017. The DGAP has further submitted that the ITC in respect of the inter-unit branch transfers was not considered because the output tax liability on outward taxable turnover had also been excluded from the period between 1-14 November, 2017. He has also claimed that the Respondent had submitted SKU wise summary of supplies and not B2C invoices for outward taxable supplies and random check of the invoices revealed that in some cases, ITC was availed by him without being in possession of the invoices on the date of availing of ITC which was in contravention of the provisions of Section 16 (2) (a) of the CGST Act, 2017 and thus was not allowed. The DGAP has also claimed that he was justified in applying the anti-profiteering provisions at the product/SKU level, in the absence of invoice-wise outward taxable supplies data as the Respondent had failed to provide the same.
29. The DGAP has also contended that Para-13 on page 6 of the Report explained the rationale for rejectin

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reduction in rate of tax to the consumer. He has also pleaded that the increase in the cost of inputs including royalty, variable rent and other expenses was a factor in the determination of the price but it was independent of the output GST rate and hence it could not be claimed that the elements of cost unrelated to GST where affected by the change in the output GST rate and therefore, the increase in the cost of inputs as claimed by the Respondent had not been be considered.
30. The DGAP has also submitted that full ITC was allowed after implementation of the GST w.e.f. 01.07.2017 on the purchase of Inputs, Input Services and Capital Goods which the Respondent had availed. He has further submitted that the Respondent had informed that he carried the same level of inventory on 30th June 2017 & on 31 st October 2017 and therefore, for computing the ratio of denial of ITC to the taxable turnover, the ITC for the period from July, 2017 to October, 2017, as furnished by him in the GSTR

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prior to implementation of GST which had no bearing on the supplies made during the period from July, 2017 to October, 2017. He has further stated that as the Respondent had received the tax invoices after 15.11.2017 hence he was not eligible to avail the ITC in terms of the Notification dated 14.11.2017, therefore the same could not be considered for computation of   denial of Input Tax Credit to net turnover ratio. The DGAP has also maintained that as the Respondent had already availed ITC on the original purchase of inputs, the same had been considered in the computation of denial of ITC to net turnover. He has further maintained that the output tax liability on inter-unit branch transfer turnover had been excluded from the ITC on the one hand and the inter-unit branch transfer turnover has been excluded from the outward taxable turnover on the other hand which neutralised the impact of branch transfer transactions on the computation. He has also informed that there was r

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n left out and therefore, this had no bearing on computation of denial of ITC ratio to the turnover during the period from 1 st July 2017 to 31 st October 2017. The DGAP has also claimed that the law did not provide a supplier any flexibility to suo moto decide on any other modality to pass on the benefit of ITC or reduction in rate of tax to the recipients except by commensurate reduction in the price and hence computation of the marginal gain/loss as per the financial statements could not be considered in view of the statutory provisions. He has further claimed that a supplier did not have discretion to pass on the benefit of input tax credit or reduction in the rate of tax on one product, by reducing the price of another product. He has also contended that price included both basic price and also the tax charged on it and therefore, any excess amount collected from the recipients amounted to profiteering which must be returned to the recipients or deposited in the CWF.
31. We have

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of GST @ 5% w.e.f. 15.11.2017 does not amount to passing on the benefit of the above reduction as has been claimed by the Respondent. The Respondent had also claimed benefit of ITC as per TRAN-I statement as well as per his GST-3B returns filed for the period between 01.07.2017 to 14.11.2017 which was also required to be passed on to the consumers. Perusal of the Report filed by the DGAP nowhere shows that he had gone in to computation of the base price fixed by the Respondent as he has neither sought details of the cost of the inputs used by the Respondent nor of his profit margins and therefore, the allegation of computation of base price by the DGAP made by the Respondent is completely wrong. The DGAP has only tried to investigate whether the benefits of reduction in the rate of tax and the ITC have been passed on to the customers by the Respondent or not as per the provisions of Section 171 or not. It is absolutely clear even from a cursory perusal of the provisions of Section 171

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ginal note. The intent of legislature shows that it proposes to hold the suppliers accountable for passing on both the above benefits as they have been given out of the public exchequer and any breach of the same will fall foul of the above Section.
33. The Respondent has also claimed that the provisions of Section 171 were applicable only in the case of the contracts of sale which had been entered in to prior to the change in the rate of tax or grant of benefit of ITC and both the parties had agreed to such change as per the provisions of Section 64 A of the Sale of Goods Act, 1930. Perusal of the above Section shows that it's provisions are not applicable in view of the specific provisions of Section 171 which stipulate that both the benefits have to be passed on as and when they are given to the customers by the Government out of its own revenue which has nothing to do with the contract between the two parties. Therefore, the contention of the Respondent made in this regard is

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on of the Respondent that the increase in the prices of food article, electricity, fuel, variable rent, royalty and commissions etc. was not considered by the DGAP while calculating the profiteered amount is untenable because the DGAP has mandate to only examine whether the benefit of tax reduction or ITC has been passed on or not. The order passed in the Case of Kumar Gandharv v. KRBL Ltd. on 04.05.2018 by this Authority pertains to Basmati in the case of which the GST was increased from 0% to 5% and hence there has been no reduction in the rate of tax and therefore, the provisions of Section 171 were not attracted as is the case in respect of the Respondent.
35. The Respondent has wrongly claimed that the DGAP had assessed that the Respondent had made a profit of Rs. 24,81,33,857/- due to the average increase in the base price by 10.45%. The claim made by the Respondent is incorrect as the DGAP has taken the above amount as additional sale realisation made by the Respondent on accou

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d the amount which he was bound to pass on to his customers due to reduction in the rate of tax and benefit of ITC. The Respondent must remember that the benefit of reduction in the rate of tax as well as the benefit of ITC have been given by the Central as well as the State Government by sacrificing their own revenue in favour of the general public and the Respondent has no right to appropriate them. The Respondent has himself admitted that the DGAP had calculated the ratio of denial of ITC to total taxable turnover as 9.11% whereas it was 9.43% as per his own assessment and hence he had profiteered by 0.32% which demolishes his entire defence of having not profiteered. The amount of profiteering assessed by the DGAP cannot be described as miniscule as it has been earned by fleecing millions of customers.
37. It is also apparent from the record that the DGAP has calculated the ratio of ITC to the total taxable turnover pertaining to the period between July, 2017 to October, 2017 as 9

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the tax invoices in respect of the supplies made during the period of July to October, 2017 were received by the Respondent late. The Respondent must have been prudent enough to make necessary provisions for payment of rent to avoid loss of ITC which he had failed to do.
38. It is also revealed from the Report of the DGAP that the output tax liability on inter-unit branch transfer turnover had been excluded from the ITC on the one hand and the inter-unit branch transfer turnover has been excluded from the outward taxable turnover on the other hand which had neutralised the impact of branch transfer transactions on the computation of ratio of ITC to total taxable turnover and hence amounts of Rs. 49,26,86,384/- and Rs. 47,15,04,275/- had rightly not been included in the calculation. Perusal of the Annexure-36 and 37 attached with the Report show that they have been framed by taking in to account the information pertaining to the period between 01.11.2017 to 30.11.2017 and hence the co

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e Respondent had charged Rs. 120.34/- as base price for one piece of Regular Mccafe Latte and Rs. 21.66/- as 18% CGST+SGST and thus an amount of Rs. 142/- was charged for the above item. Vide invoice dated 15.11.2017 the base price was increased by Rs. 14.90/- to Rs. 135.24/- and Rs. 6.76/- were charged as CGST+SGST @ 5% and the above product was supplied at the same MRP of Rs. 142/-. Therefore, it is clear that the base price was increased by 12.38% which is more than the ratio of denial of ITC of 9.11%. The Respondent had not only compelled his customers to pay extra base price of Rs. 3.94/- per item and he had also forced them to pay extra GST of Rs. 0.20/- and thus the benefit or Rs. 4.14/- per piece had been denied to the customers. Had the Respondent not increased the price of the above product the same would have been supplied at the MRP of Rs. 137.86/- only and the customer would have got the benefit of Rs. 4.14/- in the MRP. Perusal of Annexure-32 further proves that the Respo

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y and Procedure” vide it's Notification dated 28.03.2017 which has been prominently displayed on it's website. It is regrettable that the Respondent is raising this issue without consulting the website. The Respondent has also claimed that the provisions of Section 171 and Rules 122-137 could not be enforced in the absence of machinery provisions which also proves that the Respondent has not read the above provisions carefully. As discussed above the provisions of Section 171 and the above Rules are very clear and unambiguous under which a comprehensive machinery comprising of the State specific Screening Committees, Standing Committee, Directorate General of Anti-Profiteering and Commissioners of Central GST and State Tax have been constituted/established under the above provisions to take cognizance of the complaints made on profiteering, their investigation and for enforcement of the orders passed by this Authority. The law settled in the cases of CIT v. B. C. Srinivasa Shet

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hence no general methodology and procedure can be prescribed for the same. Moreover, the word used in Rule 126 is to 'determine' and not to 'prescribe' the methodology and procedure. The basic aim is to ensure that both the benefits of reduction in the rate of tax and the ITC are passed on to the consumers by commensurate reduction in the prices. During the hearing the Respondent was repeatedly asked to put forth his own methodology and procedure in case he was not satisfied with the course of action adopted by the DGAP while assessing his liability for profiteering but the Respondent has failed to do so and therefore, all the objections raised by him in this behalf are frivolous and cannot be accepted.
41. The Respondent has also pleaded that he was not aware at what level the price was to be reduced. In this connection the provisions of Section 171 are very clear which state that both the benefits have to be given in the case of every supply. Therefore, the benefit i

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ing of the price of the product and hence the issues of market conditions, demand and supply and rising/falling input costs are not required to be taken in to account while determining the amount of profiteering. The Respondent cannot raise these issues by arbitrarily raising his prices on the intervening night of 14/15th November, 2017 by 10.45% on an average on the eve of the reduction in the rate of tax. He could have very well raised his prices on the basis of the above factors anytime between 01.04.2017 to 14.11.2017 which he had not done.
42. The Respondent has also suggested that this Authority should provide for appropriate machinery for recovery of ITC of Rs. 22 Lakhs which he could not avail. In this connection it is made clear that the Authority is not the appropriate forum before which such issue can be raised. The Respondent can always approach the competent forum to redress his grievance of denial of ITC as per the provisions of Section 12, 13 and 16 of the above Act. He

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t in the facts of the present case. The allegation of the Respondent that he had been directed to increase his prices by 9.11% only amounted to restriction on his right to fix the prices is misplaced as no such direction has been passed by the DGAP as the Respondent has himself revised the prices and while doing so he has deliberately pocketed the benefits which he was required to pass on to his customers in addition to his regular margins which being in contravention of the provisions of Section 171 of the above Act is liable to the consequences prescribed under Rule 133 of the above Rules.
44. The Respondent has also claimed that after 15.11.2017 the input tax paid by him had become a cost which needed to be factored in the price. This contention of the Respondent is frivolous as he had no details of the input tax available to him on 15.11.2017 when he had increased the prices. The Respondent has been duly given the benefit of transitional credit and therefore, he should not have an

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quired to be passed on to the customers or the amount of profiteering done by the Respondent is determined as Rs. 7,49,27,786/- as per the details mentioned in para 12 supra under the provisions of Rule 133 (1) of the CGST Rules, 2017 as the Respondent has failed to pass on both the above benefits to his customers. The above amount is inclusive of the extra GST which the Respondent had forced the customers to pay due to wrong increase in his basic prices otherwise the prices to be paid by them should have further got reduced by the amount of the GST illegally charged from them. Depositing of the extra GST in the Govt. account can not absolve the Respondent of the allegation that he had compelled them to pay more price than what they should have paid and hence it amounts to denial of benefit under Section 171 of the above Act.
47. Accordingly, the Respondent is directed to reduce his prices by way of commensurate reduction keeping in view the reduced rate of tax and the benefit of ITC

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the Respondent reduces/had reduced his prices commensurately and submit his Report.
48. As per the above narration of the facts it is clear that the Respondent has resorted to profiteering by charging more price than that he could have charged by issuing incorrect tax invoices. He has further acted in conscious disregard of the obligation which was cast upon him by the law by issuing incorrect invoices in which the base prices were deliberately enhanced exactly equal to the amount of reduced tax and benefit of ITC and thus he had denied the benefit of ITC and reduction in the rate of tax granted vide Notification dated 14.11.2017 to his customers. Accordingly he has committed an offence under Section 122 (1) (i) of the CGST Act, 2017. Therefore, a show cause notice may be issued to the Respondent to explain why penalty under the provisions of the above Section should not be imposed on him.
49. A copy of this order may be supplied to all the Applicants, the Respondent and the concern

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Smt. Mandalika Sakunthala And Director General Anti-Profiteering, Central Board of Indirect Taxes And Customs, New Delhi Versus MIs Fabindia Overseas Pvt. Ltd.
GST
2018 (11) TMI 1011 – NATIONAL ANTI-PROFITEERING AUTHORITY – 2018 (19) G. S. T. L. 533 (N. A. P. A.)
NATIONAL ANTI-PROFITEERING AUTHORITY – NAPA
Dated:- 16-11-2018
Case No. 13/2018
GST
Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member, Ms. R. Bhagyadevi, Technical Member And Sh. Amand Shah, Technical Member
For The Applicant : Sh. Anwar Ali, Additional Commissioner
For The Respondent : Sh. Shashank Goel, Advocate and Sh. Siddhant Mehra, Corporate Head-Finance & Taxation
ORDER
1. The present report dated 16.08.2018 has been received from the Directorate General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the case are that two applications, both dated 21.02.2018, were filed by the A

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o submitted copies of the tax invoices dated 09.01.2018 for both the products and the labels of the products showing their MRP, Batch No. and manufacturing dates in support of her claims.
2. The above applications were examined by the Standing Committee on Anti-Profiteering and were referred to the DGAP vide minutes of its meeting dated 02.05.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017.
3. The DGAP had called upon the Respondent to submit reply on the above allegations and also to suo-moto determine the quantum of benefit which was not passed on by him after reduction in the rate of tax. The Respondent had submitted replies vide letters dated 25.06.2018, 06.07.2018, 13.07.2018 and 20.07.2018 informing that there was increase in the rate of tax and hence no benefit could be passed on by him. The Respondent had further contended that he was procuring both the products on inter-state basis from their sole vendors and his tax liability had increased by 3.5

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.5% with Nil Central Excise duty + 14.5% VAT in the case of “Bathing Bar” and 16.5% with 2% Central Excise duty + 14.5% VAT in the case of “Instant Drink Powder 50 Gms.” which had been incresed to 18% after the implementation of the GST w.e.f. 01.07.2017 and hence there was no reduction in the rate of tax ..
5. It has also been stated by the DGAP in his Report that when the pre-GST stock of Bathing Bar in the GST regime was compared with it's stock in the pre GST regime, no change was found the in the Input Tax Credit (ITC) and the Respondent's cost price had also remained the same at Rs. 28.64 per piece. After the rate of tax had increased from 14.5% to 18% after implementation of the GST, the above product was supplied by the Respondent in the GST regime at the same MRP of Rs. 95/- by reducing his margin of profit from his base price from Rs. 82.97 to Rs. 80.51 by suffering loss of Rs. 2.46 per Bathing Bar in gross margin during the GST regime. It is also been observed by th

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remained unchanged at Rs. 95/- which had resulted in the loss of Rs. 3.76 out of gross margin to the Respondent. The DGAP has therefore, contended that as the reduction in the base Price was more than the lTC, the allegation of profiteering was not established.
7. In respect of the Instant Drink Powder 50 Gms. the DGAP has observed that there was no change in ithe ITC and the Respondent's cost price had remained the same at Rs. 18.86. The DGAP has further observed that when the sale of old pre GST stock of the above product in the GST era was compared with the sale in the pre-GST regime, although the rate of tax had increased from 14.5% to 18% after the implementation of the GST the Respondent had still sold the above product at the same MRP of Rs. 501-, by reducing his base price from Rs. 43.67 to Rs. 42.37 and had thus suffered a loss of Rs. 1.30 in his gross margin in the GST regime. The DGAP has therefore found that since the base price had been reduced to maintain the same MR

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tax had increased in respect of both the above products but the Respondent had reduced his base prices and the profit margins to maintain the same MRP inspite of the increase in the tax rate, therefore, The anti-profiteering provisions contained in Section 171 (1) of the CGST Act, 2017 had not been contravened by the Respondent.
10. The above report was considered by the Authority in its meeting held on 21.08.2018 and it was decided to hear the Applicant No. 1 on 05.09.2018. However, she did not appear during the hearing and informed via e-mail dated 04.09.2018 that she would not be able to attend and there was nothing more to supplement her complaints except that the Authority might ascertain whether the Bathing Bars were actually manufactured in the unit located in Uttarakhand and hence were eligible for availing the benefit of area based exemption, as had been mentioned in Para 9 of the Report or from any other unit.
11. An opportunity of hearing was also accorded to the Responde

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Act 2017 read as under:-
(1). “Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.”
14. It is apparent from the perusal of the facts of the case narrated above that the actual pre-GST tax rate on the above products was not 27% (12.5%Excise Duty + 14.5% VAT), as had been mentioned by the Applicant No.1 in her applications, but it was 14.5% (Nil Central Excise Duty+ 14.5% VAT) in the case of “Bathing Bar” and 16.5 % (2% Central Excise Duty + 14.5% VAT) in the case of “Instant Drink Powder 50 Gms.” It is also revealed that the Respondent was procuring both the above products on interstate basis from their sole vendors and this tax liability had increased by 3.5% post GST from 14.5% to 18% w.eJ 01.07.2017 and therefore, he had suffered loss on the supply of both the products in question. It is further revealed that the base price of these products had been redu

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M/s A.M Enterprises Versus State Of U.P. And 2 Others
GST
2018 (11) TMI 957 – ALLAHABAD HIGH COURT – 2019 (20) G. S. T. L. 194 (All.)
ALLAHABAD HIGH COURT – HC
Dated:- 16-11-2018
Writ Tax No. – 1451 of 2018
GST
Pankaj Mithal And Ashok Kumar JJ.
For the Petitioner : Nishant Mishra
For the Respondent : C.S.C.
ORDER
The goods of the petitioner in transit were intercepted and detained on 3.11.2018 at about 9:22 p.m., at Sardhana Meerut as the goods were not accompanied by the e-way bill.
Section 129 (1) of the U.P. Goods and Service Tax Act, 2017 (in short of the Act) provides that the goods so detained or seized shall be released after detention or seizure subject to the conditions specified.
The aforesaid provision

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hese circumstances, we call upon the respondents to file personal affidavit of Arun Kumar Singh, V Assistant Commissioner (Mobile Squad-3) Meerut to show cause why notice under Section 129 (3) of the Act or the order of release of the goods could not be passed immediately after the goods were detained or seized on 3.11.2018.
The affidavit may be filed within two weeks.
In the meantime as the petitioner who is the registered dealer/owner of the goods, we direct the respondents to release the goods and vehicle on the petitioner's furnishing security other than cash and bank guarantee of the amount equivalent to the proposed tax and penalty and indemnity bond of the same amount in accordance with Section 129 (1) (a) of the Act.
List on

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New Measures to Combat Tax Evasion: Stricter Verification and Monitoring for Benami GST Registrations Underway.
Circulars
GST – States
Benami GST Registration – Instructions on measures to

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Polypropylene Leno Bags Classification Dispute: Doctrine of Equitable Estoppel Blocks Tariff Heading Change Under GST.
Case-Laws
GST
Classification of goods under GST – Since the Respondent declared that Polypropylene Leno Bags manufactured by weaving polypropylene strips (tapes) under Tariff Heading 3923 29 90 for claiming duty drawback, and no explanation could be offered as to why the Tariff Heading should be changed now to 6305 33 00, it is not permissible under the doctrine of equi

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GST Applies to Online Educational Journals for Indian Institute of Management, Bengaluru; No Exemption Available.
Case-Laws
GST
Liability of GST – supply of online educational journals or per

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Composite Supply Contract: Principal Supply is Custom Milling of Paddy with 5% GST Rate for Entire Agreement.
Case-Laws
GST
Liability of GST – as the said contract comprises of two or more supplies (i.e. transportation, supply of packing material & incentives) and one of which is principal supply i.e. custom milling of paddy, it shall treated as composite supply – rate of GST to be determined based on principal supply i.e. 5%.
TMI Updates – Highlights, quick notes, marquee, annotati

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GST ANTI-PROFITEERING LAW: TAKEAWAYS FROM NAA RULINGS
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 15-11-2018

Statutory Provisions
The provisions are contained in the GST law as per following provisions:
CGST Act, 2017
Section 171 on Anti-profiteering measures
IGST Act, 2017
Section 20 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to IGST Act
UTGST Act, 2017
Section 21 which stipulate that provisions of CGST Act, 2017 shall apply mutatis mutandis to UTGST Act
SGST Act, 2017
Section 171 on Anti-profiteering measures
The Rules for Anti Profiteering are contained in Chapter XV (Rule Nos. 122 to 137) of the Central Goods and Services Tax Rules, 2017.
Section 171 provides that it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices.
Scope and Objective
Anti-profiteering is a new concept being tried out for the fi

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rom the NAA orders passed so far.
Though the NAA concluded in more than half of these orders that profiteering could not be established or was absent, yet in the other cases / complaints, indulgence in Anti-profiteering was established and penal action taken. The NAA orders can be tabulated as follows:
NAA Orders: A Snapshot
Complaint Against
Issue
Anti-Profiteering
M/s Vrandavaneshwree Automotive Pvt. Ltd.
Price difference on sale of car in GST regime booked in pre-GST regime
Not established
M/s KRBL Ltd
Levy of GST @5% on branded rice in GST regime
Not established
M/s Schindler India Pvt. Ltd., Mumbai
Purchase of lift before and after GST, GST charged on excise duty
Not established
M/s Flipkart Internet Pvt. Ltd., Bangalore
Discount withdrawn on sale of Godrej almirah on Flipkart
Not established
M/s Sharma Trading Company
Rate of Vaseline reduced from 28% to 18%, but supplier charged 28%
Upheld
M/s Pyramid Infratech Pvt. Ltd.
ITC benefit on construction not p

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guidance.
Underlying Principles
Based on the Orders of NAA, following principles of anti-profiteering law can be established:
* A supplier cannot be allowed to resort to profiteering.
* GST benefit irrespective of the amount has to be passed on to the buyer.
* Cases of Anti-profiteering have to be determined on case to ease basis taking into account tax benefit, other costs etc.
* Benefit cannot be denied on the grounds of convenience to retailer or customer in terms of price, being in whole number (e.g. on ₹ 5 per pack benefit was 21 paisa only and hence not passed on).
* Rate change should result in commensurate reduction in price of product/ service.
* Anti-profiteering law is applicable to both, B2B and B2C transactions.
* Benefit on a particular product cannot be passed on or transferred to other products of the same company and benefit denied to a class of customers. It should be done product wise, not even an a basket of products.
* Benefit should be pas

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n / respective State.
* Penalty can be levied but after due adjudication, following principles of natural justice.
* Anti-profiteering cases are booked on pan India basis. In other words, NAA has jurisdiction all over India.
* Complaints / cases are processed either on complaint or on suo moto basis by DGAP.
* Complaints can be made against anti-profiteering irrespective of the amount involved (small or big).
* Over pricing / indulgence in profiteering would tantamount to issuance of incorrect invoices attracting penalty u/s 122 of the GST law.
* Implementation / monitoring of order can be directed to be done of DGAP.
The aforementioned principles or assertions have been drawn from decided orders of NAA based on factual matrix and legislative intention.
Reply By DR.MARIAPPAN GOVINDARAJAN as =
Very nice article.
Dated: 15-11-2018
Reply By Dr. Sanjiv Agarwal as =
Thanks so much, Dr. Govindrajan.
I am one of your silent admirers.
Dated: 15-11-2018
Reply By DR.MARIAP

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Oracle Financial Services Software Ltd. Versus Commissioner of CGST, Mumbai East
Service Tax
2018 (12) TMI 1426 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 15-11-2018
Appeal No. ST/86353/2018 – A/88143/2018
Service Tax
Mr. S.K. Mohanty, Member (Judicial) And Mr. P. Anjani Kumar, Member (Technical)
Shri B. Raichandani, Advocate for appellant
Shri M. Suresh, Asst. Commr (AR) for respondent
ORDER
Per: S.K. Mohanty
This appeal is directed against the impugned order dated 06.12.2017 passed by the Commissioner of CGST, Mumbai East.
2. Brief facts of the case are that the appellant is engaged in providing “Information Technology Software Service” and “Management, Maintenance or Repair Service”, defined as taxable services under the Finance Act, 1994. For providing such taxable services, the appellant got it registered with the Service Tax department. The appellant avails CENVAT Credit of service tax paid on the input services used for providing those output

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pporting evidences were produced by the appellant to demonstrate that the disputed services can be considered as input service for the Cenvat benefit.
3. Learned Advocate appearing for the appellant submits that although under the unamended definition of 'input service” (effective upto 31.03.2011) and the amended definition (with effect from 01.04.2011) the disputed services were clarified as 'input service' for the purposes of availment of Cenvat benefit. He further submits that since the disputed services were used / utilized for providing the output service and such services having been covered under the definition of input service as per the Rule 2(l) of Cenvat Credit Rules, 2004, the benefit of credit shall not to be denied to the appellant. To support his stand that the disputed services are conforming to the definition of input service, the learned Advocate has relied upon the following decisions rendered by the judicial forums:-
(a) Axis Bank Ltd. v. CCE- 2017-TIOL 3867-Cesta

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disputed services should be considered as input service in terms of Rule 2(l) of the Rules for the period upto 31.03.2011. Under the amended definition of Rule 2(l) (with effect from 01.04.2011), the assessee is permitted to avail credit on any service used for providing the output service, excepting the excluded category of services mentioned in the definition of input service. The description of disputed services provided in the impugned order, do not fall under the excluded category provided under Rule 2(l) of the Rules. Therefore, denial of Cenvat benefit on the disputed services on the ground that those services are not confirming to the definition of input service is not proper and justified. However, since the original authority had specifically recorded the findings that the appellant had not produced any documentary evidences to show nexus as well as the eligibility of Cenvat benefit on the disputed services, we are of the view that the matter should be remanded to the origina

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Calcutta Ahmedabad Roadlines Private Limited Versus State Tax Officer, Kharagpur Range And Ors.
GST
2018 (12) TMI 1408 – CALCUTTA HIGH COURT – 2018 (19) G. S. T. L. 411 (Cal.)
CALCUTTA HIGH COURT – HC
Dated:- 15-11-2018
W. P. 21257 (W) of 2018
GST
Mr Debangsu Basak, J.
For The Petitioner : Mr. Arshat Agarwal And Mr. Shovan Ghosh
For The Respondent : Mr. Arshat Agarwal And Mr. Shovan Ghosh
ORDER
It is the contention of the petitioner that, it is not in a position to upload the appeal electronically.
Learned Advocate for the State submits that, the appeal can be filed manually also. He refers to Rule 97A and 107A of the West Bengal Goods and Services Tax Rules, 2017. The Rules of 2017 permit manual filing of appeal

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Sakshi Enterprises Versus State of U.P. And 2 Others
GST
2018 (12) TMI 65 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 15-11-2018
Writ Tax No. – 1461 of 2018
GST
Pankaj Mithal And Ashok Kumar JJ.
For the Petitioner : Shubham Agrawal
For the Respondent : C.S.C.
ORDER
Heard Ms. Sanyukta Singh and Sri Subham Agrawal, learned counsel for the petitioner and Sri C.B. Tripathi, learned counsel appeared for the respondents.
The goods of the petitioner in tran

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The Goa Goods and Services Tax (Thirteenth Amendment) Rules, 2018.
38/1/2017-Fin(R&C)(80) Dated:- 15-11-2018 Goa SGST
GST – States
Goa SGST
Goa SGST
GOVERNMENT OF GOA
Department of Finance
Revenue & Control Division
__
Notification
38/1/2017-Fin(R&C)(80)
In exercise of the powers conferred by section 164 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017), the Government of Goa hereby makes the following rules further to amend the Goa Goods and Services Tax Rules, 2017, namely:-
1. (1) These rules may be called the Goa Goods and Services Tax (Thirteenth Amendment) Rules, 2018.
(2) They shall come into force with effect from the 30th day of October, 2018.
2. In the Goa Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), after rule 83, the following rule shall be inserted, namely:-
“83A. Examination of Goods and Services Tax Practitioners.- (1) Every person referred to in clause (b) of sub-rule (1) of rule 83 and who is enr

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ion centers.- The examination shall be held across India at the designated centers. The candidate shall be given an option to choose from the list of centers as provided by NACIN at the time of registration.
(6) Period for passing the examination and number of attempts allowed.- (i) A person enrolled as a goods and services tax practitioner in terms of sub-rule (2) of rule 83 is required to pass the examination within two years of enrolment:
Provided that if a person is enrolled as a goods and services tax practitioner before 1st of July 2018, he shall get one more year to pass the examination:
Provided further that for a goods and services tax practitioner to whom the provisions of clause (b) of sub-rule (1) of rule 83 apply, the period to pass the examination will be as specified in the second proviso of sub-rule (3) of said rule.
(ii) A person required to pass the examination may avail of any number of attempts but these attempts shall be within the period as specified in cla

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hall issue examination guidelines covering issues such as procedure of registration, payment of fee, nature of identity documents, provision of admit card, manner of reporting at the examination center, prohibition on possession of certain items in the examination center, procedure of making representation and the manner of its disposal.
(ii) Any person who is or has been found to be indulging in unfair means or practices shall be dealt in accordance with the provisions of sub-rule (10). An illustrative list of use of unfair means or practices by a person is as under:-
(a) obtaining support for his candidature by any means;
(b) impersonating;
(c) submitting fabricated documents;
(d) resorting to any unfair means or practices in connection with the examination or in connection with the result of the examination;
(e) found in possession of any paper, book, note or any other material, the use of which is not permitted in the examination center;
(f) communicating with others o

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satisfied with his result may represent in writing, clearly specifying the reasons therein to NACIN or the jurisdictional Commissioner as per the procedure established by NACIN on the official websites of the Board, NACIN and common portal.
(13) Power to relax.- Where the Board or State Tax Commissioner is of the opinion that it is necessary or expedient to do so, it may, on the recommendations of the Council, relax any of the provisions of this rule with respect to any class or category of persons.
Explanation:- For the purposes of this sub-rule, the expressions-
(a) “jurisdictional Commissioner” means the Commissioner having jurisdiction over the place declared as address in the application for enrolment as the GST Practitioner in FORM GST PCT-1. It shall refer to the Commissioner of Central Tax if the enrolling authority in FORM GST PCT-1 has been selected as Centre, or the Commissioner of State Tax if the enrolling authority in FORM GST PCT-1 has been selected as State;
(b) N

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y:-
“142A. Procedure for recovery of dues under existing laws.- (1) A summary of order issued under any of the existing laws creating demand of tax, interest, penalty, fee or any other dues which becomes recoverable consequent to proceedings launched under the existing law before, on or after the appointed day shall, unless recovered under that law, be recovered under the Act and may be uploaded in FORM GST DRC-07A electronically on the common portal for recovery under the Act and the demand of the order shall be posted in Part II of Electronic Liability Register in FORM GST PMT-01.
(2) Where the demand of an order uploaded under sub-rule (1) is rectified or modified or quashed in any proceedings, including in appeal, review or revision, or the recovery is made under the existing laws, a summary thereof shall be uploaded on the common portal in FORM GST DRC-08A and Part II of Electronic Liability Register in FORM GST PMT-01 shall be updated accordingly.”.
4. In the said rules, in FO

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he effective date of surrender of registration falls or furnish an undertaking to the effect that no taxable supplies have been made during the intervening period (i.e. from the date of registration to the date of application for cancellation of registration).”.
5. In the said rules, in FORM GSTR-4, in the Instructions, for Sl. No. 10, the following shall be substituted, namely:-
“10. Information against the Serial 4A of Table 4 shall not be furnished.”.
6. In the said rules, for FORM GST PMT-01 relating to “Part II: Other than return related liabilities”, the following form shall be substituted, namely:-
“Form GST PMT-01
[See rule 85(1)]
Electronic Liability Register of Registered Person
(Part-II: Other than return related liabilities)
(To be maintained at the Common Portal)
Reference No.:-
GSTIN/Temporary Id-
Date:-
Name (Legal)-
Trade name, if any-
Period- From …to… (dd/mm/yyyy)
Stay status- Stayed/Un-stayed
Act – Central Tax/State Tax/UT Tax/Integrated

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ayable due to decision of appeal, rectification, revision, review etc. will be reflected here.
4. Negative balance can occur for a single Demand ID also if appeal is allowed/partly allowed. Overall closing balance may still be positive.
5. Refund of pre-deposit can be claimed for a particular demand ID if appeal is allowed even though the overall balance may still be positive subject to the adjustment of the refund against any liability by the proper officer.
6. The closing balance in this part shall not have any effect on filing of return.
7. Reduction in amount of penalty would be automatic if payment is made within the time specified in the Act or the rules.
8. Payment made against the show cause notice or any other payment made voluntarily shall be shown in the register at the time of making payment through credit or cash. Debit and credit entry will be created simultaneously.”.
7. In the said rules, in FORM GST APL-04, after serial number 9, and the Table relating thereto, t

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r who has passed the order (optional)
15
Designation of the officer who has passed the order
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Whether demand is stayed
ð Yes ð No
17
Date of stay order
18
Period of stay
From – to –
Part B – Demand details
19.
Details of demand created
(Amount in Rs. in all Tables)
Act
Tax
Interest
Penalty
Fee
Others
Total
1
2
3
4
5
6
7
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CST Act
20.
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Signature
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_________________ Name
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Copy to:-
Note:-
1. In case of demands relating to short payment of tax declared in return, acknowledg

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ence No.
Date
Part A – Basic details
Sr. No.
Description
Particulars
(1)
(2)
(3)
1
GSTIN
2
Legal name
<>
3
Trade name, if any
<>
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Reference No. vide which demand uploaded in FORM GST DRC-07A
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Notifies the persons whose registration under the said Act has been cancelled by the proper officer on or before the 30th September, 2018 furnish the final return in Form GSTR-10 of the said rules till the 31st December, 2018.
F-A-3-42-2018-1-V-(95) Dated:- 15-11-2018 Madhya Pradesh SGST
GST – States
Madhya Pradesh SGST
Madhya Pradesh SGST
Commercial Tax Department
Mantralaya, Vallabh Bhawan, Bhopal
Bhopal, Dated 15th November, 2018
No. F.A-3-42-2018-1-V-(95).- In exercise of t

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The Madhya Pradesh Goods and Services Tax Rules, 2017
F-A-3-38-2018-1-V-(98) Dated:- 15-11-2018 Madhya Pradesh SGST
GST – States
Madhya Pradesh SGST
Madhya Pradesh SGST
Commercial Tax Department
Mantralaya, Vallabh Bhawan, Bhopal
Bhopal, Dated 15th November, 2018
No. F.A-3-38-2018-1-V-(98).-In exercise of the powers conferred by section 164 of the Madhya Pradesh Goods and Services Tax Act, 2017 (19 of 2017), the State Government hereby makes the following rules further to amend the Madhya Pradesh Goods and Services Tax Rules, 2017, namely:-
AMENDMENT
They shall come into force on the date of their publication in the Official Gazette.
2. In the Madhya Pradesh Goods and Services Tax Rules, 2017 (hereinafter referred to as

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n 3, Sub section (i), vide number G.S.R 1272(E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017, published Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299(E), dated the 13th October, 2017, the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax .credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted,”.
3, In the said rules, in rule 96, for (10), the following sub-rule shall be substituted, namely:-
“(10) The persons claiming refund of integrated tax paid on exports of goods or services should not

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The Madhya Pradesh Goods and Services Tax Rules, 2017
F-A-3-39-2018-1-V-(97) Dated:- 15-11-2018 Madhya Pradesh SGST
GST – States
Madhya Pradesh SGST
Madhya Pradesh SGST
Commercial Tax Department
Mantralaya, Vallabh Bhawan, Bhopal
Bhopal, Dated 15th November, 2018
No. F.A-3-39-2018-1-V-(97).-In exercise of the powers conferred by Section 164 of the Madhya Pradesh Goods and Services Tax Act, 2017 (19 of 2017), the State Government hereby makes the following rules further to amend the Madhya Pradesh Goods and Services Tax Rules, 2017, namely:-
AMENDMENT
They shall be deemed to have come into force with effect from the 23rd October, 2017.
2. In the Madhya Pradesh Goods and Services Tax Rules, 2017, in rule 96, for sub-rule

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SHRI. A. BALASUBRAMANIAN Versus THE ASSISTANT STATE TAX OFFICER SQUAD NO. 1, STATE GST DEPARTMENT, PALAKKAD AND MS. NAMASCO TRADERS AND EXPORTS, KUTHUPARAMBA
GST
2018 (11) TMI 1189 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 15-11-2018
WP (C). No. 8186 of 2018
GST
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADVS. SRI. T. M. SREEDHARAN (SR. ) AND SRI. V. P. NARAYANAN
For The Respondent : SMT. M. M. JASMINE, GP
JUDGMENT
The petitioner, a businessman in Tamilnadu, is the consignor of goods sent across to Kerala. On 7. 3. 2018 the Assistant State Tax Officer, Palakkad, detained the goods on these two grounds.
i. GSTIN of the recipient is incorrect, which is in violation of Rule 46 of the CGST Rules

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Corrigendum in RGST notification No. F.12(46)FD/Tax/2017-pt-II-127 dated 30th October 2018.
F.12(46)FD/Tax/2017-Pt-III-129 Dated:- 15-11-2018 Rajasthan SGST
GST – States
Rajasthan SGST
Rajasthan SGST
GOVERNMENT OF RAJASTHAN
FINANCE DEPARTMENT
(TAX DIVISION)
CORRIGENDUM
Jaipur, dated: November 15, 2018
No.F.12(46)FD/Tax/2017-Pt-III-129.- The English version of this Department's notification no. F.12(46)FD/Tax/2017-pt-II-127, dated the 30th October, 2018 shall be read with

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GST Council may have to take a view on the funding of NDRF – Shri N.K.Singh
GST
Dated:- 14-11-2018

GST Council may have to take a view on the funding of NDRF – Shri N.K.Singh
XVFC concludes International Workshop on Financing of Disaster Risk Management in India, urged to come up with a structure to make 'Disaster Mitigation' an integral part of development expenditure
XVFC concluded the International Workshop in India on Financing of Disaster Risk Management yesterday in New Delhi. The two-day conference discussed various issues related to Disaster Risk Management (DRM) ranging from urbanization, climate change, coastal erosion, localized catastrophes and the price associated with it, among many other issues. The ne

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sues on which GST Council may have to take a view.
This is not only the issue of earmarking of funds for DRM but also to ensure that funds earmarked are used for DRM like in case of funds devolved to states on account of Forest cover. Deciding on conditionality for use of such funds is a tricky thing. Shri Subhash Chandra Garg, Secretary DEA in his closing remarks urged the Commission to come up with a structure to make Disaster Mitigation an integral part of development expenditure. We need to rethink about ways to finance flexible safety net for the people during stress, he said. Dr. P. K. Mishra said that issue in funding arises due to the different nature of mitigation activities (non-contingent) and relief activities (contingent needs

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NDRF/SDRF is a key question. DRM needs are very diverse as they include relief, recovery, resilience, mitigation and therefore need careful consideration in decision making which in turn depends on availability of suitable data, analytical tools and replicable models. Experts agreed that any resilience model may be started in Pilot mode and then scaled up. Funds for DRM will require resources and investment not only from govt. but also from private sector, NGOs and civil society.
Participants including Ms. Fracine Pickup, Country Director, UNDP and Dr. Junaid Kamal, Country Director, World Bank India thanked the Chairman and members of the Commission for organizing the International Conference on DRM in India and bringing together ideas,

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Include free tool costs in component valuation u/s 15 of CGST, SGST, IGST Act 2017.
Case-Laws
GST
Valuation of goods supplied – The amortised cost of tools which are re-supplied back to the a

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Availing IGST credit
Query (Issue) Started By: – Chidambaram Subramaniam Dated:- 14-11-2018 Last Reply Date:- 2-12-2018 Goods and Services Tax – GST
Got 6 Replies
GST
Dear Sir,
Our Company provide temporary accomodation to many of the outstation candidates at the time of joining the company through a vendor and the vendor charges IGST in all their invoices.
My Query is whether the company can avail credit of the IGST charged by the vendor for such nature of expenses.
Please guide us.
thanks and regards
Chidambaram
Reply By KASTURI SETHI:
The Reply:
Dear Querist,
Will such expenses form part of Profit & Loss Account in the Company's Annual Report/Balance Sheet ?
Reply By Chidambaram Subramaniam:
The Reply:
Dear Si

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Complete Analysis of Annual Return And GST Audit Under GST Law
By: – Sandeep Rawat
Goods and Services Tax – GST
Dated:- 14-11-2018

Government has announced for annual return to be filed under Goods & Service tax Act. However a Lot of difficulties are being faced by taxpayers and professionals while filing GST returns due to technical glitches and ambiguous law. After filing monthly returns, a regular person has to even file an Annual Return which is quite detailed. it's critical to start focusing on various compliances such as input and output reconciliations, preparation and filing of annual return and GST audit certification.
Annual Return and GST Audit
GSTR-9 ANNUAL RETURN
GSTR 9 form is an annual return to be filed once in a year by the registered taxpayers under GST including those registered under composition levy scheme. It consists of details regarding the supplies made and received during the year under different tax heads i.e. CGST, SGST and IGST. It consol

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upplies declared during the financial year(FY). This detail must be picked up by consolidating summary from all GST returns filed in previous FY.
* Part-III
Details of ITC declared in returns filed during the FY. This will be summarised values picked up from all the GST returns filed in previous FY.
* Part-IV
Details of tax paid as declared in returns filed during the FY.
* Part-V
Particulars of the transactions for the previous FY declared in returns of April to September of current FY or up to the date of filing of annual returns of previous FY whichever is earlier. Usually, the summary of amendment or omission entries belonging to previous FY but reported in Current FY would be segregated and declared here.
* Part-VI
Other Information comprising details of:
* -GST Demands and refunds,
* HSN wise summary information of the quantity of goods supplied and received with its corresponding Tax details against each HSN code,
* Late fees payable and paid details and
* Se

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d and file a copy of audited annual accounts and reconciliation statement of tax already paid and tax payable as per audited accounts along with GSTR 9C.
This form is to be prepared and audited by a chartered accountant or cost accountant. This statement is to be filled for every GSTIN separately and therefore there-can be several reports of GSTR-9C for same PAN.
This form is divided into mainly 2 parts-
PART-A: RECONCILIATION STATEMENT
The figures in the audited financial statements are at PAN level. Hence, the turnover, Tax paid and ITC earned on a particular GSTIN( or State/UT) must be pulled out from the audited accounts of the organisation as a whole.
The Reconciliation Statement is divided into five parts as follows:
Part-I: Basic details:
Consists of FY, GSTIN, Legal Name and Trade Name. The taxpayer must also mention if he is subject to audit under any other law
Part-II:
Reconciliation of turnover declared in the Audited Annual Financial Statement with turnover dec

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ith a breakup of eligible and ineligible ITC and reconciliation of the eligible ITC with that amount claimed as per GSTR 9. This declaration will be after considering the reversals of ITC claimed, if any.
Part-V: Auditor's recommendation on additional Liability due to non-reconciliation-
Here, the Auditor must report any tax liability identified through the reconciliation exercise and GST audit, pending for payment by the taxpayer. This can be non-reconciliation of turnover or ITC on account of :
* Amount paid for supplies not included in the Annual Returns(GSTR 9)
* Erroneous Refund to be paid back
* Other Outstanding demands to be settled
Lastly, the instructions to the format of GSTR-9C specify that an option will be given to taxpayers to settle taxes as recommended by the auditor at the end of the reconciliation statement.
PART-B: CERTIFICATION.
The GSTR-9C can be certified by the same CA who conducted the GST audit or it can be also certified by any other CA who did no

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revise this return.
However, this fee cannot be more than 0.25% of total turnover in the respective state/union territory
There is no specific penalty prescribed in the GST Law for not getting the accounts audited by a Chartered Accountant or a Cost Accountant. Therefore, in terms of Section 125 of CGST Act, 2017, he shall be subjected to penalty up to ₹ 25,000/-.
MAJOR PROBLEM/ISSUE WHILE CARRRING OUT GST AUDIT
Major problem faced while carrying out GST audit for the financial year 2017-18
* HSN of inward supplies is required in the annual return GSTR 9 which was not needed while filing monthly GSTR 3B.
* Multiple audits under indirect tax laws: VAT audits and Service Tax audit may be required to be carried out for the first quarter and GST audit for the next three quarters;
* The difference in the annual return as per the books of accounts and GST data filed during the financial year.
* Segregated details of ITC availed are required as Inputs/Input services/ Capital

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In Re: M/s. IL&FS Education and Technology Services Limited
GST
2019 (2) TMI 1603 – APPELLATE AUTHORITY FOR ADVANCE RULING, ODISHA – 2019 (22) G. S. T. L. 515 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, ODISHA – AAAR
Dated:- 14-11-2018
ORDER No. 01/ODlSHA-AAAR/Appeal/2018
GST
SHRI RAKESH KUMAR SHARMA MEMBER AND SHRI SASWAT MISHRA, MEMBER
Present For the Appellant
1. Shri Kapil Kumar Sharma, Advocate, Partner, Lakshmikumaran & Sridharan Attorneys,
2. Smt. Saumya Dubey, Advocate, Associate, Lakshmikumaran & Sridharan Attorneys,
3. Shri Amitabh Dubey, CFO, IL&FS Education and
4. Shri Vineesh Khanna, Vice President, IL&FS Education.
1.1 M/s IL & FS Education and Technology Services Ltd. (hereinafter referred to the Applicant or the Appellant”), assigned with GSTIN 21AABCI2106H1ZC, having registered address at 51-KIIT, ITI Campus-14, Chandaka Industrial Estate, Khorda. Odisha-751024. had filed an application on 27 03.2018 under Section 100(1) of

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concerns, one such ICT project being implemented by the Appellant in the State of Odisha. The Odisha Madhyamik Shiksha Mission (hereinafter referred to as “OMSM”), Government of Odisha, has mandated the Odisha Knowledge Corporation Limited (hereinafter referred to as “OKCL”) to implement ICT project in 4000 government and government aided higher secondary schools across the State of Odisha. Accordingly, OKCL floated a tender (Tender Code No.3) on e-tendering portal of Secured e-Tendering System (SeTs).
1 4 The said tender was for Supply, Installation, Maintenance and Commissioning of Projection system, Interactive White Board, Computer Hardware, Connected Accessories, Installation of Software and other allied accessories, site prepafation (i.e. vinyl flooring, furniture and fixtures, electrical fittings, power backup facilities, LAN, etc ), maintenance of equipment and provisions of computer training services for 5 years, in 4000 schools, divided in 6 zones on the BOOT Model basis.
1

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School Project.
Entry No. 72 of Notification No. 12/2017-Central Tax(Rate), dated 28.06.2017, which is relevant to this appeal, is reproduced below for ease of reference
SL.No.
Chapter, Section, Heading, Group or Service Code (Tariff)
Description of Services
Rate (per cent)
Condition
(1)
(2)
(3)
(4)
(5)
72
Heading 9992
Services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration.
Nil
Nil
(Entry No.72 of Notification No. 12/2017- Central Tax (Rate), is same as entry No.72 of Notification SRO No. 306/2017 dated 29.06.2017, issued by the Finance Department of Government of Odisha)
1.7. The AAR, Odisha, after examining the grounds filed in the Application filed by the Applicant, has observed that three pre-perquisites are to be satisfied for the supply of services to qualify for the notified exempti

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of goods and services which are not naturally bundled. Each of the components of the composite supply are distinctly identifiable both in terms of quantity and value. The service provided or to be provided is not exclusively in the nature of training programme.
(c) Though the source of funding for the service is the State Government and Central Government, yet, as per the contract, the payment responsibility is vested on OKCL.
Therefore, the activities of the applicant by way of supply of goods and services under the ICT project are not covered under Entry 72 of the notification no. 12/2017 dated 28.06.2017, to be entitled to the benefit of exemption from GST.”
1.9 While rendering the aforesaid Ruling, the AAR has also observed that as per para 1(c) of Schedule II of the OGST/CGST Act, any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a servi

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t under the ICT Project.
1.11 The Appellant has also made a prayer for condonation of 5 days delay, under sub-section-2 of Section 100 of the CGST Act, 2017.
2. The grounds of appeal, as mentioned by the Appellant, in their Appeal, are summarised here-as-under;
2.1 First pre-requisite: The services are provided under the training programme:
The Appellant has contended that they are carrying out various activities viz. installation, commissioning, site maintenance, operation, etc. to implement the ICT Project in the government schools and government aided schools in the State of Odisha.
The Appellant relies on the following points with a view to establish that the provided by them are under training programme.
(i) All the activities undertaken under the ICT Project are naturally bundled, principal supply being that of provision of computer training;
(ii) The basic infrastructure is being developed to provide computer training to the students and teachers;
(iii) The ICT in School

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od of contract, the equipment, infrastructure, etc. are to be repaired by the Appellant at its own cost.
(b) it is the responsibility of the Appellant to obtain necessary insurance for the equipment, infrastructure, etc. Thus, for the entire contract period, the risk remains with the Appellant.
(c) the Appellant is also claiming the depreciation of the IT equipment, infrastructure, etc. Thus, the IT equipment, infrastructure appears as assets in the books of accounts of the Appellant.
Therefore, the above referred terms of the agreement clearly establish that during the period of contract, the ownership of the equipment and infrastructure lies with the Appellant.
As the entire infrastructure is owned by the Appellant, the activities of maintenance or operation of the infrastructure, hardware, software, etc. carried out by the Appellant are with regard to self-owned equipment. Thus, it cannot be said that the Appellant is engaged in the supply of operation or maintenance services in

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re developed by it would be transferred after the expiry of the contract period (i.e. 5 years). This is also clearly provided in the agreement that the ownership of the entire hardware, software, other equipment, etc. will be transferred at zero value at the end of the contract period.
In view of the above, it can be concluded that during the entire period of contract, the Appellant is not engaged in the supply of goods inasmuch as supply of goods is taking place only after the expiry of contract period of 5 years.
It is to be noted that the Appellant is claiming depreciation of the IT equipment in its books of accounts and as per the accounting policy, the normal life span of IT equipment is 5 years. Thus, after 5 years, the net realizable value of IT equipment in the books of account of the Appellant reduces to zero. As the IT equipment does not have any realizable value in the books of accounts of the Appellant, the same are being transferred to SMED at zero value.
Without prejud

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#39; used in the above referred Entry No. 72 has not been defined in the Notification No. 12/2017. Further, this term is also not defined in the CGST/OGST Act as well as in CGST/OGST Rules.
2.2 Further, the Appellant has rebutted to the findings of the Advance Ruling Authority, as mentioned herein below:
(a) that under the CGST Act, the concept of composite supply is applicable only when two or more identifiable and taxable supplies of goods or services or both, which are naturally bundled, are rendered in conjunction with each other. To understand the same, attention is invited to the definition of composite supply under the CGST Act.
(b) As per Section 2(30) of the CGST Act, “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

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upply taking place at the end of the contract period, at zero value.
The Appellant would like to highlight here that as per the contract entered into between the Appellant and OKCL, title in the goods/infrastructure is transferred to SMED and not to OKCL. In such a case, even by applying Para l(c) of Schedule II, it cannot be said that the Appellant is supplying goods to OKCL.
(e) With respect to services provided to Government of State of Odisha, the Appellant submitted that OKCL is a corporation established under Companies Act, 1956, which has been mandated by OMSM, Government of Odisha to act as an implementing agency to implement the ICT Project, on its behalf.
Further, admittedly, the funds for implementation of this project are being provided by OMSM to OKCL, for further release to the Appellant, in accordance with the agreed terms. Moreover, in case, OKCL fails to discharge its obligations under the agreement entered into between OMSM and OKCL, OMSM would step into OKCL's

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“total expenditure is borne by the Central Government. ..”) and not 'paid' by the government. There is no dispute as regards to the fact that it is the responsibility of OMSM (State Government) to ensure that appropriate funds are provided for implementation of the ICT Scheme. In fact, the said submission can be traced to Clause 5.2 of the agreement between OMSM and OKCL (Annexure-D). Therefore, even though the expenditure is 'paid' by OKCL under contract to the Appellant, the same is 'borne' by Centra! and State Government only (jointly).
3. A personal hearing in the matter was held on 26.10.2018. Shri Kapil Kumar Sharma, Advocate alongwith other representatives of the Appellant, appeared for P.H. on 26.10.2018 on behalf of the Appellant and reiterated the written submissions made in the Appeal. He also submitted additional written submissions and reiterated the submissions made therein.
4 1 we have carefully considered the submissions made by the Appellant i

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lared on 17.08.2018. Further, 18.08.2018 and 19.08.2018 were Saturday and Sunday. The Appellant also submitted that the Corporate Office of the Applicant is in Noida, U.P., and the appeal was drafted by the Applicant's Attorneys, whose office is situated in New Delhi. Hence, the entire appeal book was prepared in New Delhi and it was subsequently posted to another office of Applicant in Bhubaneswar, Odisha. The appeal book and filing documents were dispatched from Delhi on 17.08.2018 through Blue Dart Express courier. The courier was expected to reach within 2 days of dispatch, i.e., by 19.08.2018. However, due to delay in transit, the documents were received by Applicant's Odisha office on the evening of 20.08.2018. It is thus submitted that the delay in filing the appeal has been caused due to technical factors beyond the control of Applicant.
4.4 On records, it is found that the Appellant has received the copy of the Advance Ruling passed by AAR, Odisha, on 17.07.2018 and h

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ng, Group or Service Code (Tariff)
Description of Services
Rate (per cent)
Condition
(1)
(2)
(3)
(4)
(5)
72
Heading 9992
Services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration.
Nil
Nil
* Entry No. 72 of Notification SRO No. 306/2017-Finance Department is identical to the Entry No. 72 of Notification No.12/2017-Central Tax(Rate).
4.6 On going through the aforesaid notification, it is noticed that the following three conditions are required to be satisfied in order for the supply to qualify for the notified exemption, under Entry No.72 of Notification No. 12/2017-Central Tax(Rate).
(a) The supply has to be a supply of Service provided to the Central Government, State Government or Union territory Administration;
(b) Such service must be under any training programme;
(c) The total expenditure

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viding services to Government.
4.9 On perusal of para 8 of the Agreement dated 12.09.2013 between OKCL and the Appellant it is noticed that the Appellant is required to supply and install the specified goods provide specified services in the ICT Labs of the Govt and Govt. Aided High Schools located in the specified zones. Therefore, it is evident that the Appelant has made supplies to OKCL. which is a body corporate and registered under the Companies Act 1956 as a Company.
4.10 We notice that the Authority for Advance Ruling. Odisha, in their findings (para 5 3 of the Order)has clearly observed that OKCL was promoted by the Higher Technical education department Govt of Odisha and was incorporated under the Compares Act 1956 as a public limited company to create new paradigm in education and development through universalization and integration of Information Technology in teaching learning and educational management processes in particular and socio economic transformative processes i

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a State Therefore OKCL is neither the Sate Government nor a part of the State Government of Odisha or the Central Government and therefore the supplies by the applicant to OKCL should not be held to be a supply to Government.
4.11 No counter argument has been put forth by the Appellant to substatniate their claim that the supplies were made by them to the Government. Therefor we fully agree with the finding arrived at the Advance Ruling given by the Advance Ruling (AAR), Odisha, on this point and hold so Even if some percentage of shares are owned by Government of Odisha in the OKCL. the company cannot be construed as Government. Therefore, we hold that the Appellant does not meet the primary requirement of the conditions as laid down under Entry No. 72 of Notification No.12/2017-Central Tax(Rate), dated 28.06.2017, so as to be eligible for the said exemption, as the services provided by the Appellant to OKCL cannot be construed as services provided to the Central Government, State G

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. will be transferred at zero value at the end of the contract period Therefore, the stand taken by the Appellant is self-contradictory in as much as on one hand, they claim that the provision of service as operation or maintenance of self-owned equipment does not amount to supply of services to third party. But on the other hand, they claim that the ownership in the infrastructure developed by it would be transferred after the expiry of the contract period (i e 5 years). The said transfer of ownership is also unconditional Therefore we hold that the consideration received by the Appellant is in respect of provision of supplies, taxability of which has been discussed in the foregoing paragraphs.
Moreover, under Schedule-II (1)(c) of the CGST Act, 2017/SGST it is clearly defined that any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods.
4.14 It is also ob

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Tamil Nadu Goods and Services Tax (Amendment) Ordinance, 2018
TAMIL NADU ORDINANCE NO. 2 OF 2018 Dated:- 14-11-2018 Tamil Nadu SGST
GST – States
Tamil Nadu SGST
Tamil Nadu SGST
Tamil Nadu Acts and Ordinances
The following Ordinance which was promulgated by the Governor on the 13th November 2018 is hereby published for general information:-
An Ordinance to amend the Tamil Nadu Goods and
Services Tax Act, 2017.
WHEREAS the Legislative Assembly of the State is not in session and the Governor of Tamil Nadu is satisfied that circumstances exist which render it necessary for him to take immediate action for the purposes hereinafter appearing;
NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article 213 of the Constitution, the Governor hereby promulgates the following Ordinance:-
1. Short title and commencement.
(1) This Ordinance may be called the Tamil Nadu Goods and Services Tax (Amendment) Ordinance, 2018.
(2) (i) Sections 3 and 30 shall be d

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uot;Central Board of Indirect Taxes and Customs" shall be substituted;
(3) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely:-
"(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and";
(4) clause (18) including the Explanation thereunder shall be omitted;
(5) in clause (35), for the expression "clause (c)", the expression "clause (b)" shall be substituted;
(6) in clause (69), in sub-clause (f), after the expression "Article 371", the expression "and Article 371J" shall be inserted;
(7) in clause (102), the following Explanation shall be added, namely:-
"Explanation.- For the removal of doubts, it is hereby clarified that the expression "services" includes facilitating or arranging transactions in securities.".
3. Amendment of section 7.
In section 7 of the principal Act,-
(

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of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.".
5. Amendment of section 10.
In section 10 of the principal Act,-
(1) in sub-section (1),-
(a) for the expression "in lieu of the tax payable by him, an amount calculated at such rate", the expression "in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate" shall be substituted;
(b) in the proviso, for the expression "one crore rupees, as may be recommended by the Council.", the expression "one crore and fifty lakh rupees as may

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be omitted.
8. Amendment of section 16.
In section 16 of the principal Act, in sub-section (2),-
(1) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:-
"Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services-
(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.";
(2) in clause (c), for the expression "section 41", the expression "section 41 or section 43A" shall be substituted.
9. Amendment of section 17.
In section 17 of the principal Act,-
(1) in sub-section (3),

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ting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available,-
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged,-
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;
(b) the following supply of goods or services or both,-
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or air

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;, the expression "under entries 84 and 92A" shall be substituted.
11. Amendment of section 22.
In section 22 of the principal Act,-
(1) in sub-section (1), after the proviso, the following proviso shall be added, namely:-
"Provided further that where such person makes taxable supplies of goods or services or both from a special category State in respect of which the Central Government has enhanced the aggregate turnover referred to in the first proviso, he shall be liable to be registered if his aggregate turnover in a financial year exceeds the amount equivalent to such enhanced turnover.";
(2) in the Explanation, in clause (iii), the following shall be added at the end, namely:-
"except the State of Jammu and Kashmir and the States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand.".
12. Amendment of section 24.
In section 24 of the principal Act, lor clause (x), the following clause shall be substituted, namely:

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n 29 of the principal Act,-
(1) in the marginal heading, after the expression "Cancellation", the expression "or suspension" shall be inserted;
(2) in sub-section (1), after clause (c), the following proviso shall be added, namely:-
"Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.";
(3) in sub-section (2), after the proviso, the following proviso shall be added, namely:-
"Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.".
15. Amendment of section 34.
In section 34 of the principal Act,-
(1) in sub-section (1),-
(i) for the expression "Where a tax invoice has", the expression "Where one or more tax invoices ha

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or the time being in force.".
17. Amendment of section 39.
In section 39 of the principal Act,-
(1) in sub-section (1),-
(a) for the expression "in such form and manner as may be prescribed", the expression "in such form, manner and within such time as may be prescribed" shall be substituted;
(b) the expression "on or before the twentieth day of the month succeeding such calendar month or part thereof" shall be omitted;
(c) the following proviso shall be added, namely:-
"Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.";
(2) in sub-section (7), the following proviso shall be added, namely:-
"Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Gov

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shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.
(4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.
(5) The amount of tax specified in the ou

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and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.".
19. Amendment of section 48.
In section 48 of the principal Act, in sub-section (2), after the expression "section 45", the expression "and to perform such other functions" shall be inserted.
20. Amendment of section 49.
In section 49 of the principal Act,-
(1) in sub-section (2), for the expression "section 41", the expression "section 41 or section 43A" shall be substituted;
(2) in sub-section (5),-
(a) in clause (c), the following proviso shall be added, namely:-
"Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax.";
(b) in clause (d), the following proviso shall be added, namely:-
"P

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ons of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, Central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.".
22. Amendment of section 52.
In section 52 of the principal Act, in sub-section (9), for the expression "section 37", the expression "section 37 or section 39" shall be substituted.
23. Amendment of section 54.
In section 54 of the principal Act,-
(1) in sub-section (8), in clause (a),-
(a) for the expression "on zero-rated supplies", the expression "on export" shall be substituted;
(b) for the expression "such zero-rated supplies", the expression "such exports" shall be substituted;
(2) in the Explanation, in clause (2),-
(a) in sub-clause (c), in item (i), after the expression "foreign exchange", the expression "or in Indian rupees wherever permitted by the Reserve Bank of Indi

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tion 112 of the principal Act, in sub-section (8), in clause (b), after the expression "arising from the said order," the expression "subject to a maximum of fifty crore rupees," shall be inserted.
27. Amendment of section 129.
In section 129 of the principal Act, in sub-section (6), including the proviso, for the expression "seven days", in two places where it occurs, the expression "fourteen days" shall be substituted.
28. Amendment of section 143.
In section 143 of the principal Act, in sub-section (1), in clause (b), after the proviso, the following proviso shall be added, namely:-
"Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years, respectively.".
29. Amendment of Schedule I.
In Schedule I of the principal Act, in paragraph 4, for the expression "taxable person", the expression

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Processing of refund under the GST.
33T of 2018 Dated:- 14-11-2018 Maharashtra SGST
GST – States
Office of the
Commissioner of State Tax,
(GST), 8th floor, GST Bhavan,
Mazgaon, Mumbai-400010.
TRADE CIRCULAR
To,
…………………………
…………………………
No. JC/HQ-I/GST/Refund/Trade Cir./01/2017-18 Mumbai, Date: 14/11/2018
Trade Cir. No. 33T of 2018
To,
…………………..
–
Subject: : Processing of refund under the GST.
Sir/Gentlemen/Madam,
1. Various representations have been received seeking clarification on issues relating to refund. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Commissioner of State tax, Maharashtra State, in exercise of its powers conferred by section 168 (1) of the Maharashtra Goods and Services Tax Act, 2017 (hereinafter referred to as the “MGST Act”), hereby clarifies the issues as detailed

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re being filed in a semi-electronic environment and the processing was completely based on the information provided by the claimants, it becomes necessary that invoices are scrutinized. Accordingly, it was clarified that the invoices relating to inputs, input services and capital goods were to be submitted for processing of claims for refund of integrated tax where services are exported with payment of integrated tax; and invoices relating to inputs and input services were to be submitted for processing of claims for refund of input tax credit where goods or services are exported without payment of integrated tax.
3.2. The claimant shall submit the details of the invoices on the basis of which input tax credit had been availed during the relevant period for which the refund is being claimed, in the format enclosed as Annexure-A manually along with the application for refund claim in FORM GST RFD-01A and the Application Reference Number (ARN). The claimant shall also declare the eligib

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aimant at the end of the tax period for which the refund claim is being filed after the return for the said period has been filed; and
(c) The balance in the electronic credit ledger of the claimant at the time of filing the refund application.
4.2. After calculating the least of the three amounts, as detailed above, the equivalent amount is to be debited from the electronic credit ledger of the claimant in the following order:
(a) Integrated tax, to the extent of balance available;
(b) Central tax and State tax/Union Territory tax, equally to the extent of balance available and in the event of a shortfall in the balance available in a particular electronic credit ledger (say, State tax), the differential amount is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case).
4.3. The procedure described in para 3.2 above, however, is not presently available on the common portal. Till the time such facility is made available on the co

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ion of the Act and rules made thereunder the proper officer shall order for the rejected amount to be recredited to the electronic credit ledger of the claimant using FORM GST RFD-01B. For recovery of this amount, a demand notice shall have to be simultaneously issued to the claimant under section 73 or 74 of the MGST Act, as the case may be. In case the demand is confirmed by an order issued under subsection (9) of section 73, or sub-section (9) of section 74 of the MGST Act, as the case may be, the said amount shall be added to the electronic liability register of the claimant through FORM GST DRC-07. Alternatively, the claimant can voluntarily pay this amount, along with interest and penalty, if applicable, before service of the demand notice, and intimate the same to the proper officer in FORM GST DRC-03 in accordance with sub-section (5) of section 73 or sub-section (5) of section 74 of the MGST Act, as the case may be, read with sub-rule (2) of rule 142 of the MGST Rules. In such

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01B) only after the receipt of an undertaking from the claimant to the effect that he shall not file an appeal or in case he files an appeal, the same is finally decided against the claimant.
6. Scope of rule 96(10) of the MGST Rules:
6.1. Rule 96(10) of the MGST Rules, as amended retrospectively by notification No. 39/2018-State Tax, dated 18.09.2018 provides that registered persons, including importers, who are directly purchasing/importing supplies on which the benefit of reduced tax incidence or no tax incidence under certain specified notifications has been availed, shall not be eligible for refund of integrated tax paid on export of goods or services. For example, an importer (X) who is importing goods under the benefit of Advance Authorization/EPCG, is directly purchasing /importing supplies on which the benefit of reduced/Nil incidence of tax under the specified notifications has been availed. In this case, the restriction under rule 96(10) of the MGST Rules is applicable to

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rt tax authority (Centre or State), has refused to disburse the relevant sanctioned amount calling into question the validity of the sanction order on certain grounds. E.g. a tax officer of one administration has sanctioned, on a provisional basis, 90 per cent. of the amount claimed in a refund application for unutilized ITC on account of exports. On receipt of the provisional sanction order, the tax officer of the counterpart administration has observed that the provisional refund of input tax credit has been incorrectly sanctioned for ineligible input tax credit and has therefore, refused to disburse the tax amount pertaining to the same.
7.2. It is clarified that the remedy for correction of an incorrect or erroneous sanction order lies in filing an appeal against such order and not in withholding of the disbursement of the sanctioned amount. If any discrepancy is noticed by the disbursing authority, the same should be brought to the notice of the counterpart refund sanctioning aut

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f the MGST Rules provides that where any deficiencies have been communicated under rule 90(3), the amount debited under rule 89 (3) shall be re-credited to the electronic credit ledger. Therefore, the intent of the law is very clear that in case a deficiency memo in FORM GST RFD-03 has been issued, the refund claim will have to be filed afresh.
8.2. It has been learnt that certain field formations are issuing show cause notices to the claimants in cases where the refund application is not re-submitted after the issuance of a deficiency memo. These show-cause-notices are being subsequently adjudicated and orders are being passed in FORM GST RFD-04/06. It is clarified that show-cause-notices are not required to be issued where deficiency memos have been issued. A refund application which is re-submitted after the issuance of a deficiency memo shall have to be treated as a fresh application. No order in FORM GST RFD-04/06 can be issued in respect of an application against which a deficie

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Asian Bikes Private Limited Versus Union of India and others
GST
2018 (11) TMI 1188 – PUNJAB AND HARYANA HIGH COURT – TMI
PUNJAB AND HARYANA HIGH COURT – HC
Dated:- 14-11-2018
CWP No. 28733 of 2018 (O&M)
GST
Mr. Rajesh Bindal and Mr. Manoj Bajaj
Present Mr. Jagmohan Bansal and Mr. Chetan Jain, Advocates, for the petitioner.
Mr. Tajender K. Joshi, Advocate, for respondent nos. 1 to 3. Mr. Pankaj Gupta, Additional Advocate General, Punjab, for respondent no.4.
Rajesh Binda

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