Catering Services Under B2B and B2C Models Classified Under Clause (i) of Notification No. 11/2017, As Amended.
Case-Laws
GST
Classification of services – catering services provided by the Ap
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Profiteering Allegations Dismissed: Price Reductions on 'Bathing Bar' and 'Instant Drink Powder' Exceed ITC Benefits.
Case-Laws
GST
Profiteering – 'Bathing Bar' and 'Instant Drink Powder 50 G
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Detailed analysis of the ambit and scope of clause (d) of sub-section (5) of section 17 of the Central Goods and Services Tax Act, 2017 [CGST Act]
By: – RameshKumar Patodia
Goods and Services Tax – GST
Dated:- 21-11-2018
Goods and Services Tax, commonly known as “GST”, is a multi-stage consumption-based value added tax levied on the supply of goods and services and most acclaimed tax reforms of the century which was brought into effect from the 1st day of July '2017 upon enactment of various State and Central GST legislation for which the roadmap was laid by the Constitution (101st) Amendment Act, 2016.
The GST replaced the existing multiple cascading taxes levied both by the Centre and the State and all powerful GST Council was assigned the task of Implementation of the law. The Council prescribed five tax slabs for collection of tax viz. 0%, 5%, 12%, 18% and 28% including various rules and regulations.
The rationale behind introduction of GST is laid down in the Raj
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nd the GST council with the avowed objective of effective implementation has had multiple meetings and in each of these meetings various issues arising upon the implementation has been addressed though multiple issues still remain.
While no doubt it would take years for the GST law to become perfect in view of the diverse nature of the Country with several prominent sectors, Real Estate Sector is one of the sectors of the country which is gripping with multiple issues of falling sales, rising cost of inputs, labour issues, income-tax issues etc. One prominent issue which is hotly debated across the country as far as real estate sector is concerned, is the Issue of allowability of input credit towards inputs and input Services used in the construction of a Shopping complex, Mall and/or office complex. The general consensus amongst the various stakeholders seems to be that such input credit is not allowable in view of the express provisions as contained in Section 17(5)(d) of the CGST A
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rimarily, it is to be noted that Section 16 of the CGST Act, 2017 (hereafter referred to as Act) deals with the 'Eligibility and Conditions for taking Input Tax Credit' wherein sub section (1) states that “every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner as specified in section 49, be entitled to take credit of input tax charged on supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person”.
On reading of the above stated provision, it is clear that subject to certain conditions, every registered person is eligible to take credit of input taxes charged on the supply of goods or services or both to him provided the goods or services –
i) are used; or
ii) Intended to be used in the course or furtherance of his business
Provisions of Section 17(5)(d) of the CGST Act
Howe
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ot eligible for being taken as credit.
Meaning of the phrase “on his own account”
Now a question arises is – what is the meaning of the phrase “on his own account”. The CGST Act nowhere defines the said phrase and therefore ordinary meaning of the said expression has to be taken. The plain and simple meaning of the said term would be “for his own purposes”. The phrase “on his own account” cannot be taken to refer to a situation where any taxable person who is engaged in any business or profession and uses the goods or services or both on his own account. This is because immediately after the phrase “on his own account”, the words “including when such goods or services or both are used in the course or furtherance of business” is written. Apparently if the meaning of the phrase “on his own account” is deemed to be wide enough to cover every situation of business or commerce including the situation where a real estate company is intending to utilise the Immovable property for the purpo
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when utilised by any person 'on his own account' unless the input tax credit is used or intended to be used in the course or furtherance of business. Therefore, what is not allowed by section 16(1) cannot be said to have been restricted via Section 17(5).
Rationale behind introduction of the provisions as contained in Section 17 of the CGST Act
Now it is to be seen as to what is the rationale behind introduction of the provisions as contained in Section 17 of the CGST Act which starts with the heading ” Apportionment of credit and blocked credit. The first four sub-sections of section 17 viz. sub-section (1) to (4) deals with the situation where the credit is apportioned between eligible and ineligible credit depending upon the utilisation of the goods and services for the purpose of any business and the other purposes and it is Section 17(5) which deals with the cases relating to the blocked credit where the input tax credit is blocked in certain situations as contained in the said
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Act
The general rule of interpretation is that there should not be additional inclusion of words while interpreting the provisions of a statute. The provisions must be construed strictly on the basis of plain language used by the legislature.
It is also well-settled principle of law that at first one has to apply "literal interpretation" and only in cases of absurd results, one has to apply "purposive interpretation”. It is well settled law that while interpreting a statute the basic principle of literal rule of interpretation has to be followed (See B. Premanand and Ors. v. Mohan Koikal and Ors. reported in 2011 (3) TMI 1590 – SUPREME COURT .
The relevant portion of the said decision is as follows:
"9. It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is the literal rule of interpretation. The other rules of interpretation e.g. the mischief rule, purposive interpretatio
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ty “which is intended for re-sale” or seeks to block input credit in respect of an immovable property “which is intended for the purposes of leasing out”. The said interpretation will be patently against the decisions of the Apex Court cited hereinabove and will result in an absurd situation where a company which is engaged in the construction as well as rendition of Real Estate services will be denied the input tax credit in all cases since primarily a real estate company is expected to be engaged in the selling of the properties or renting of the properties and the property in such a situation may be constructed by it on its own account as it is not expected that a real estate company will know in advance the purpose for which the construction is being done i.e., for the purpose of sale or for the purpose of renting out and till such time, the decision is made whether the company will sell or rent out, the construction will always be on own account and therefore if the interpretation
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under construction property and the constructed property. Though the GST Council did not deal specifically with the issue at hand but what is to be seen is that there are disputes in the manner of taxation of real estate sector while implementing the GST Law.
In the light of the discussion hereinabove, it can be safely concluded that the phrase “own account” by any stretch of imagination cannot be interpreted to mean that it covers a situation where the property is intended to be leased out. It is not permissible to assume or intend when the intention of the law makers is very clear. Even if the purposive interpretation is applied, from a simple reading of the provisions as contained in Section 17 , it is apparent that in a situation where a movable asset after purchase is rented out then there are express provisions in Section 17 to allow the Input tax credit on purchase of the movable asset against the output taxable supply of the renting of the movable asset and thus it cannot be
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hat the literal construction of a situate must be adhered to unless the context renders it plain that such a construction cannot be put on the words in question- this is what is stated in Webster's third new International Dictionary:
“Land, buildings, machinery, apparatus and fixtures employed in carrying on trade or other industrial business”
The said decision of the Apex Court was considered by Hon'ble Allahabad High Court in the case of CIT Lucknow-II Vs Kanodia Warehousing Corporation reported in 1979 (11) TMI 97 – ALLAHABAD HIGH COURT and the Hon'ble Court observed as follows:-
In order to find out if a building or a structure or part thereof constitutes “plant” the functional test must be applied. It must be seen whether the subject matter involved, that is, the building or structure or part thereof, constitutes an apparatus or a tool of the tax payer or whether it is merely a space where the tax payer carried on his business. If the building or structure or part thereof is so
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t and machinery” and “plant or machinery” cannot be taken to mean the same thing and the definition of the phrase “plant and machinery” as given in the explanation in our opinion can be applied in Chapter V and VI only where the phrase “plant and machinery” has been used and not where “plant or machinery” has been used. In this regard, it may be noted that the word “or” is normally disjunctive and “and” is normally conjunctive but at times they are read as vice versa to give effect to the manifest intention of the legislature as disclosed from the context. One does sometimes reads “or” as “and” in a statute but one does not do it unless you are obliged because “or” generally does not mean “and” and “and” does not generally mean “or”. Where provision is clear and unambiguous, the word “or” cannot be read as “and” by applying the principles of reading down (See Principles of Statutory Interpretation 13th edition 2012 Page No 485-486).
In the instant case, while section 17(5)(c) of the A
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e) dated 28-06-2017 prescribes the rate of Central Tax in respect of different kinds of supply of services wherein the rate in respect of supply of renting of immovable property service has been prescribed under heading No. 9972 (Real Estate Services) as 18% (CGST and SGST).
Also, the said notification contains a table wherein in Column No. 5 restrictions in respect of utilisation of input tax credit have been prescribed in respect of certain kinds of supply of service but no such restrictions have been prescribed therein in respect of renting of immovable property service taxed under the heading Real Estate Services.
In this regard it is pertinent to note that while prescribing different bands of tax rate in respect of GST, five bands of tax rate has been prescribed viz. 0%, 5%, 12%, 18% and 28%. These bands of tax rate has been prescribed on the basis of principle that 0%, 5% and 12% is in respect of essential and needy area and also where there are certain restrictions on the allo
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lation to construction of immovable property against the output services of Renting in the erstwhile service tax legislation were specifically brought in indirectly by amending the Cenvat Credit Rules, 2004, only after catena of judgements held that the input tax paid on inputs used and construction services utilised for the construction of property used for the provision of renting services shall be allowed as cenvat credit on the pretext that renting service could not have been rendered without construction of property.
However, unlike the amended provision under the service-tax as stated herein above, there is no such express provision under the GST law.
GST law itself was introduced in order to allow seamless input credit of tax paid on input and input services used for the provision of output taxable supply and if the interpretation as being sought to be done is allowed to be done; it will be patently against the legislation itself without there being reasonable justification fo
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no need to insert the phrase at all and it was sufficient to restrict the provision to “own account”. Therefore the interpretation that the taxable supply by way of renting of the property is covered within the meaning of “own account” is ruled out, unless it is read in conjunction with the phrase including when such goods or services or both are used in the course or furtherance of business.
Now the question arises whether when one is using the goods or services or both for the purpose of construction of an immovable property, can it be said that such goods or services or both are used in the course or furtherance of business. It is not so. The goods and services when used for the construction of an immovable property directly, they cannot simply by such usage be said to have been used in the course or furtherance of business. If the intention of the law makers was to restrict the credit in case the immovable property was used in the course or furtherance of business, then the law ma
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ne of the reasons given by putting this sector in the normal tax bracket of 18% by saying that the sector is now eligible for the input credit in respect of the supply of materials like cement, steel etc.
The business of a Real Estate player can be that of construction for sale, renting, leasing, time share and others. All these businesses are inextricably linked and it is difficult to carve out one from another and the analysis of the provisions has to be therefore done in the light of this.
The plain and simple interpretation of the said phrase can be to say that the said phrase seeks to disallow the input tax credit when the goods or services or both are used in the course of any business i.e., where the immovable property is used as a space for the purpose of running the business.
Recently, one writ petition has been filed in Karnataka High Court on this issue and is awaiting the judgement.
Conclusion:
Across the globe, in similar situations VAT on construction cost is eligibl
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ITC ON FACTORY BUILDING GOODS AND LABOUR CHARGES
Query (Issue) Started By: – SAFETAB LIFESCIENCE Dated:- 21-11-2018 Last Reply Date:- 21-11-2018 Goods and Services Tax – GST
Got 6 Replies
GST
Dear Experts,
Please advise us whether we can take ITC on the following different cases
1. Investment on Factory Building on purchase of Building construction materials and booked in Fixed Assets
2. Investment on Admin Building on purchase of Building construction materials and booked in Fixed Assets A/c.
3. Investment on Factory Building on payment of Labour charges and booked in Fixed Assets A/c.
4. Investment on Admin Building on payment of Labour charges and booked in Fixed Assets A/c.
5. Expenses on Factory Building repairs o
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By YAGAY andSUN:
The Reply:
ITC on Civil Structure is not allowed. For details, please refer Section 17(5) of the CGST Act.
Reply By Ramaswamy S:
The Reply:
ITC not eligible as per Section 17(5) of CGST Act. Further there is a recent Advance Ruling by Telangana on the matter.
Regards
S.Ramaswamy
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
I endorse the views of both experts Shri Yagay and Ramasamy.
Reply By Ganeshan Kalyani:
The Reply:
Reproducing extract of exclusion clause.
Sec 17(5)(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;
(d) goods or services or both received by a ta
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Warranty Charges received from supplier outside India
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 21-11-2018 Last Reply Date:- 6-1-2019 Goods and Services Tax – GST
Got 2 Replies
GST
XYZ(India) importing goods from PQR (Japan) which is a parent company. During warranty period, if any defect is found in these goods, PQR is paying the warranty charges to XYZ. Is XYZ liable to pay GST on it? If yes under which provisions?
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
In
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CHELLAPERUMAL VAIKUNDASEKAR PROPRIETOR, AYYA VAIKUNDA TRADERS Versus ASSISTANT STATE TAX OFFICER SQUAD NO. III, STATE GST DEPARTMENT, THIRUVANANTHAPURAM, JOINT COMMISSIONER OF STATE TAX-1, THIRUVANANTHAPURAM, THE STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM, PRINCIPAL SECRETARY AND ADDITIONAL COMMISSIONER STATE GOODS AND SERVICE TAX DEPARTMENT, THIRUVANANTHAPURAM AND UNION OF INDIA, REPRESENTED BY REVENUE SECRETARY, DEPARTMENT OF REVENUE MINISTRY OF FINANCE, NEW DELHI
GST
2019 (1) TMI 140 – KERALA HIGH COURT – [2019] 63 G S.T.R. 204 (Ker)
KERALA HIGH COURT – HC
Dated:- 21-11-2018
WP (C). No. 31227 of 2018
GST
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADVS. SRI. K. M. FIROZ, AH
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f mandamus or any other appropriate writ order or direction.
(iii) To declare that re-processed plastic mats (RP Mats or RP Plastic Mats for short) comes under HSN code No.4601 of Customs Tarriff Act, 1975.
(iv) To declare that Sections 129 and 130 of Kerala Goods and Service Tax Act, 2017 and Central Goods and Service Tax Act, 2017 and related provisions the Rules made relating to that are unreasonable, arbitrary, illegal and unconstitutional being violative of Articles 14 and 265 of the Constitution of India.
(v) To declare that Rule 138 of Kerala Goods and Service Tax Rules, 2017 and Central Goods and Service Tax Rules, 2017 are ultra vires Kerala Goods and Service Tax Act, 2017 and Central Goods and Service Tax Act, 2017 and un
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s and Service Tax Act, 2017 after the lapse of the Kerala Goods and Service Tax Ordinance, 2017.
(ix) To issue a direction to the respondents not to implement or not to insist on Rule 140 of the Kerala Goods and Service Tax Rules, 2017 and Central Goods and Service Tax Rules, 2017 and Form GST INS-04 prescribed there under and to keep in abeyance of the same by issuing a writ of mandamus or any other appropriate writ, direction or order.”
3. The learned Division Bench of this Court in Renji Lal Damodaran Vs. State Tax Officer Judgment dated 6.8.18 in W.A.No.1640/2018 has dealt with an identical issue.
4. Applying the ratio of that judgment, I direct the respondent authorities to release the petitioner's goods and vehicle on his “f
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DINDA ANTES Versus THE COMMISSIONER OF COMMERCIAL TAXES KERALA STATE GST DEPARTMENT, THIRUVANANTHAPURAM, THE DEPUTY COMMISSIONERKERALA STATE GST DEPARTMENT, TRICHUR, THE STATE TAX OFFICER, TRICHUR, THE GOODS AND SERVICES TAX NETWORK PVT. LTD AND GOODS AND SERVICE TAX COUNCIL, NEW DELHI
GST
2018 (12) TMI 137 – KERALA HIGH COURT – [2019] 61 G S.T.R. 398 (Ker)
KERALA HIGH COURT – HC
Dated:- 21-11-2018
WP(C). No. 36026 of 2018
GST
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : ADVS. SRI. SOJAN JAMES AND SHRI. SIVANKUTTY S.
For The Respondents : ADV. SRI. P. R. SREEJITH, SC, GOODS AND SERVICES TAX NETWORK AND THUSHARA JAMES, GP
JUDGMENT
The petitioner, a registered dealer under the Kerala Value Added Tax Act, has now
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ar outlines the procedure the Nodal Officers is to follow. It reads:
5. Nodal officers and identification of issues
5.1 GSTN, Central and State government would appoint nodal officers in requisite number to address the problem a taxpayer faces due to glitches, if any, in the Common Portal. This would be publicized adequately.
5.2 Taxpayers shall make an application to the field officers or the nodal officers where there was a demonstrable glitch on the Common Portal in relation to an identified issue, due to which the due process as envisaged in law could not be completed on the Common Portal.
5.3 Such an application shall enclose evidences as may be needed for an identified issue to establish bona fide attempt on the part of the
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Officer for the issue resolution.
5. So, in this case also, the petitioner may apply to the additional sixth respondent Nodal Officer. The petitioner applying, the Nodal Officer will look into the issue and facilitate the petitioner's uploading FORM GST TRAN-1, without reference to the time-frame. Ordered so.
6. I may also observe that if the petitioner applies within two weeks after receiving this judgment, the Nodal Officer will consider it and take steps within a week thereafter. If the uploading of FORM GST TRAN-1 is not possible for reasons not attributable to the petitioner, the authority will also enable it to take credit of the input tax available at the time of its migration.
With these directions, I dispose of the Writ Petitio
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T.M. ABOOBUKKAR AND KHALEEL RAHIMAN Versus ASSISTANT STATE TAX OFFICER SQUAD NO. VII, STATE GST DEPARTMENT, KERALA, THIRUVANANTHAPURAM, JOINT COMMISSIONER OF STATE TAX-1, THIRUVANANTHAPURAM, THE STATE OF KERALA REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM, SECRETARY, TAXES DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM AND UNION OF INDIA, REPRESENTED BY REVENUE SECRETARY, DEPARTMENT OF REVENUE, NEW DELHI
GST
2018 (12) TMI 136 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 21-11-2018
WP(C). No. 28414 of 2018
GST
MR DAMA SESHADRI NAIDU, J.
For The Petitioners : ADVS. SRI. K. M. FIROZ AND SMT. M. SHAJNA
For The Respondents : ADVS GOVERNMENT PLEADER DR. THUSHARA JAMES ASSISTANT SOLICITO
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the goods detained by issuing a writ of mandamus or any other appropriate writ order or direction.
(iii) To declare that Sections 129 and 130 of Kerala Goods and Service Tax Act, 2017 and Central Goods and Service Tax Act, 2017 and related provisions the Rules made relating to that are unreasonable, arbitrary, illegal and unconstitutional being violative of Articles 14 and 265 of the Constitution of India.
(iv) To declare that Rule 138 of Kerala Goods and Service Tax Rules, 2017 and Central Goods and Service Tax Rules, 2017 are ultra vires Kerala Goods and Service Tax Act, 2017 and Central Goods and Service Tax Act, 2017 and unconstitutional.
(v) To declare that Section 126(6) of the KSGST Act as well as CGST Act insofar as it ove
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sue a direction to the respondents not to implement or not to insist on Rule 140 of the Kerala Goods and Service Tax Rules, 2017 and Central Goods and Service Tax Rules, 2017 and Form GST INS-04 prescribed there under and to keep in abeyance of the same by issuing a writ of mandamus or any other appropriate writ, direction or order.”
3. The learned Division Bench of this Court in Renji Lal Damodaran Vs. State Tax Officer1 has dealt with an identical issue.
4. Applying the ratio of that judgment, I direct the respondent authorities to release the petitioners' goods and vehicle on their “furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rule
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The Commissioner of Central GST Mumbai – West Versus Motilal Oswal Securities Ltd.,
Service Tax
2018 (11) TMI 1395 – BOMBAY HIGH COURT – TMI
BOMBAY HIGH COURT – HC
Dated:- 21-11-2018
CENTRAL EXCISE APPEAL NO. 20 OF 2018
Service Tax
AKIL KURESHI & M.S. SANKLECHA, JJ.
Mr. Sham Walve, for the Appellant.
Mr. Bharat Raichandani with Ms. Pragya i/b. UBR Lergal, for the Respondent.
P.C:
This Appeal under Section 35G of the Central Excise Appeal Act, 1944 (the Act), challenges the order dated 16th November, 2016 passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal).
2. The Revenue urges the only the following question of law for our consideration:
“Whether on the facts and circumstances of the
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The Commissioner of CGST & Central Excise, Nashik Versus Mahindra & Mahindra Ltd.,
Central Excise
2018 (11) TMI 1287 – BOMBAY HIGH COURT – TMI
BOMBAY HIGH COURT – HC
Dated:- 21-11-2018
CENTRAL EXCISE APPEAL NO. 28 OF 2018
Central Excise
AKIL KURESHI & M.S. SANKLECHA, JJ.
Mr. Pradeep S. Jetly with Mr. J. B. Mishra, for the Appellant.
Ms. Padmavati Patil with Mr. Anil Wani i/b. ANS Law Associates, for the Respondent
P.C:
This Appeal under Section 35G of the Central Excise Act, 1944 (the Act), challenges the order dated 18th May, 2017 passed by the Custom, Excise and Service Tax Appellate Tribunal (the Tribunal).
2. Revenue urges the following questions of law, for our consideration:
“(a) Whether in the facts and in
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assifiable under Chapter 8702.00 while it the Revenue's contention that its is appropriately classifiable under head 8703.00 of the Tariff Act.
4. The questions as proposed by the Revenue arises out of an order of the Tribunal which essentially deal with an issue of appropriate classification. Therefore, an Appeal under Section 35G of the Act from an order on classification, is not maintainable before this Court.
5. In fact, Apex Court in Navin Chemicals Mfg. & Trading Co. Ltd., v/s. Collector of Customs 2002 TIOL 460 has held that a dispute as to classification of goods directly relates to the rate of duty for purposes of assessment. Further, this Court in APM Terminals (I) Pvt. Ltd., v/s. Commissioner of Central Excise 2018 TIOL 189
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“Business Support Service” with Back Office and Accounting is not Zero Rated u/s 16 IGST Act 2017.
Case-Laws
GST
Supply of Services – supply of “Business Support Service' comprising of 'Back
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Credit Note u/s 34
Query (Issue) Started By: – sunil jain Dated:- 20-11-2018 Last Reply Date:- 2-12-2018 Goods and Services Tax – GST
Got 6 Replies
GST
As per section 34(2) of CGST Act, any registered person who issues Credit Note(CN), shall declare the details of such CN in the return for the month during which CN has been issued but not later than September following the end of the FY in which supply was made.
Say if supply of good was made in March 2018, and goods are returned back in October, does it mean CN can not be issued in Oct or so?
Pl clarify.
Thanks,
CA. R.K. Aggarwal
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
As per the provisions of law it is yes. But some clarifications have to be issued in this regard
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then vat was not allowed to be reversed. In some state it was one year. Since GST is consolidaicon of erstwhile law then I doubt that GST Council will allow to take benefit on the sales return after September month of subsequent financial year.
Reply By KASTURI SETHI:
The Reply:
There is legal force in the views Sh.Ganeshan Kalyani Ji. What I want to say voice should be raised before GST Council on the ground that there must be no restriction of time factor for sales return. Supplied goods should be allowed to return directly or indirectly at any time.
Reply By CASusheel Gupta:
The Reply:
You can ask your customer to send the goods on Tax Invoice instead of on delivery challan and issue of credit note.
Discussion Forum – Knowledge
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GST on Rental Income
Query (Issue) Started By: – Ethirajan Parthasarathy Dated:- 20-11-2018 Last Reply Date:- 28-11-2018 Goods and Services Tax – GST
Got 7 Replies
GST
Due to litigation between landlord of commercial property & tenant, the rents were not received. Civil suit for eviction is likely to be filed.
Is landlord liable to pay GST under the above circumstances.
One view could be that the landlord has to pay GST atleast to the extent of rental deposit already received. Is this view correct. What will be the situation after fully setting off the rental deposit.
Reply By KASTURI SETHI:
The Reply:
This is an extract of FAQ dated 31.3.17
Q4. What are the necessary elements that constitute supply under CGST/SGST Ac
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rate what will be the position after rental deposit is fully adjusted & tenant has neither vacated nor paying rent
Reply By KASTURI SETHI:
The Reply:
There is not an iota of doubt about leviability of GST on rental deposit. It is an advance. Dr.Govindarajan Sir has rightly opined.
Reply By YAGAY andSUN:
The Reply:
It will be treated as payments made in advance (i.e.deposits) and adjust accordingly. Hence liable for charging of GST.
Reply By Ganeshan Kalyani:
The Reply:
When the deposit was received it was not taxable as it was not for the service rendered or to be rendered. But when it is adjusted against the rent to be receivable but not received then it looses its identity as a deposit and it takes the name of rent. Hence, when th
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E-way bill for goods send for at exhibition not for sale
Query (Issue) Started By: – Pramod Jadhav Dated:- 20-11-2018 Last Reply Date:- 21-11-2018 Goods and Services Tax – GST
Got 3 Replies
GST
I am holding Gst Registeration in maharashtra state as composition taxable person, i have to send goods for at exhibition held in another state i.e. Calcutta so how can i send goods through transport is E-way bill compulsary or i can send through delivery challan. and if i can send through de
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Examination for Confirmation of Enrollment of GST Practitioners Postponed to 17.12.2018
GST
Dated:- 20-11-2018
Reference is invited to Press Release dated 1.11.2018 regarding exam for GS
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High Court Orders Revenue Authorities to Correct Mistaken SGST Remittance to IGST, Easing Fund Transfer Process.
Case-Laws
GST
Remittance of amount under the head 'SGST', instead of 'IGST' –
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M/s PYRAMID INFRATECH PRIVATE LIMITED Versus UNION OF INDIA AND ORS.
GST
2019 (3) TMI 149 – DELHI HIGH COURT – TMI
DELHI HIGH COURT – HC
Dated:- 20-11-2018
w. p. (C) no. 10999 of 2018 C. M. Appl. Nos. 42815, 42816 And 48246 of 2018
GST
MR SANJIV KHANNA AND MR ANUP JAIRAM BHAMBHANI, JJ.
For The Petitioner : Mr.Abhishek A. Rastogi and Ms.Rashmi Deshpande, Advocates
For The Applicant : Mr.Atul Kumar and Mr.Harshit Sanwal, Advocates
For The Respondents : Mr.Vinod Diwakar, CGSC Mr.Amit Bansal, Sr. Standing Counsel And Ms.Gargi Sethi, Advocate for respondent
ORDER
C.M. APPL. No. 42816/2018 (Exemption)
Exemption is allowed subject to just exceptions. Application disposed of.
W.P.(C) No. 10999/2018
Counsel for th
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, 2018. Rs. 7.16 crores was paid in cash in August, 2017 and Rs. 5.39 crores was paid through input tax credit. No tax has been paid thereafter. It is stated that the last instalment was accounted for making adjustment against input tax credit. In other words, total amount paid in cash or input tax credit was Rs. 12.56 crores.
3. Counsel for respondents state that the total amount collected from VAT/buyers under the GST regime is Rs. 18.37 crores.
4. Our attention has also been drawn to the letter dated 05.10.2018 written by the petitioner wherein it is recorded that the petitioner had offered to pay an amount of Rs. 5,11,60,450/- to resolve the issue amicably with the customers.
5. Learned counsel for the petitioner submits that this fi
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ANDHRA ORGANICS LIMITED Versus CCT, VISAKHAPATNAM GST
Central Excise
2019 (2) TMI 434 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 20-11-2018
APPLICATIONs No. E/ROM/30722-30723/2018 In APPEAL Nos. E/30445-30446/2018 – M/30580 – 30581/2018
Central Excise
Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL)
Shri M. Rajendran, Advocate for the Appellant.
Shri C. Mallikarjuna Reddy, Superintendent /AR for the Respondent.
ORDER
Per: Mr. P.V. Subba Rao
1. These applications for rectification of mistake were filed by the applicant against the Final Order No. A/30750-30751/2018, dated 24.07.2018 on the following grounds:
a) At the time of hearing of the appeals, the Counsel submitted that the Order-in-Appeal for t
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d on merits. I have not found any evidence to support either argument. Be that as it may, the earlier order of the Commissioner (Appeals) is not a binding precedent on the CESTAT and therefore an independent decision can be taken in this regard”.
On the second question of binding precedence of the CESTAT's decision as claimed by the applicant, the final order specifically relied on the ratio of the judgments of Hon'ble High Court of Bombay in the case of Manikgarh Cement [2010(20) STR 456 (Bom.)] and the judgment of Hon'ble Apex Court in the case of Maruti Suzuki Limited [2009(240) ELT 641 (SC)], while deciding the matter.
3. I, therefore, find that there is no error apparent on record calling for rectification of mistake.
4. The applic
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M/s. MUTHOOS ENTERPRISES Versus COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI
Central Excise
2019 (2) TMI 254 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
E/42093/2018 – FINAL ORDER NO. 42920/2018
Central Excise
Smt. Sulekha Beevi C.S, Judicial Member
For the Appellant: Shri S. Jayanth, Cons.
For the Respondent: Shri L. Nandakumar, AC (AR)
ORDER
The brief facts are that the appellants are engaged in the manufacture of Bitumen Emulsion and were availing the facility of SSI exemption as per Notification No.8/2003-CE., dated 01.03.2003 till 2010-11. They got registered with Central Excise department from 18.01.2012. On verification of invoices issued by the appellants for the financial year 2011-12, it was noticed that their aggregate value of clearances had reached Rs. 150 lakhs on 12.09.2011 and that they are not eligible for SSI exemption for the financial year 2011-12. They had cleared excisable goods valued at Rs. 68,09,255/- without payin
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matter. He submitted that the main raw material used for the manufacture is Bitumen procured from the oil industries namely, IOCL, BPCL and HPCL. The appellants were availing SSI exemption till 2010-11 as their clearances was below Rs. 150 lakhs. However, it was omitted to notice by oversight that the clearances had exceeded Rs. 150 lakhs on 31.10.2011. It was detected by the appellants themselves and have issued a letter to the department dated 18.01.2013 explaining their clearances have exceeded the prescribed limit and, therefore, they have got registered for payment of Central Excise duty. In such letter, the appellants had given the details of clearances as well as the credit eligible on inputs. The details of 50 invoices as to the eligibility of input for adjustment to the duty liability for the disputed period of 2011-12 was clearly stated in the detailed letter. In the letter dated 18.01.2013, issued to the jurisdictional Assistant Commissioner, the appellants had given tabula
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ome out of the SSI exemption. The appellants believed that the audit party was satisfied that there is no duty liability for the period 2011-12.
3. To the surprise of the appellants', a show-cause notice dated 22.08.2016 was issued invoking extended period, alleging suppression of facts and demand of duty of Rs. 9,81,894/-. The appellants contested the demand and submitted the invoices on which credit was available. They had submitted 36 invoices on which the credit of Rs. 3,73,607/- was worked out by the adjudicating authority. Due to the Wardha Cyclone in 2016, the appellants had lost some of the invoices and could not produce the entire invoices. Though, the appellants had pleaded that the invoices were produced before the audit party and that audit had not raised any objection, it was not considered by the original authority. At the time of hearing the appeal before the Commissioner (Appeals), the appellants had put forward these contentions and also contested the disallowance
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de letter dated 18.01.2013 giving all details with regard to duty liability for the clearances made in 2011-12. The appellants themselves have furnished such details. The demand then made after more than two years alleging suppression of facts cannot sustain. Further, that the audit party had visited the premises and verified all documents in 2013 and had not raised any objection. He, therefore, pleaded that the extended period invoked is incorrect and not sustainable.
5. The learned Authorised Representative Shri L. Nandakumar supported the findings in the impugned order. Admittedly, the appellants exceeded the SSI limit during the period 2011-12. They have taken registration only on 18.01.2012 and have started paying the duty only from such date. The appellants were able to produce the entire invoices to support their claim of Cenvat credit. The authorities below have given assessments of credit of all the invoices produced by the appellants. Therefore, the demand is legal and prope
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18.01.2012. Since then, they have been discharging the excise duty after availing Cenvat Credit. The department had sent an audit party as per letter of the audit party, dated 10.06.2013, the appellants have furnished all the details with regard to the original sales and purchase invoices for the year 2011-12. The appellants have produced all the documents before the audit party. It is seen that the audit party had pointed out only the ineligibility of credit on Steel Roofing to an amount of Rs. 23,084/-. The appellants had rectified the objection by paying up the wrongly availed credit along with interest. The audit party also after verification of amounts had not raised any objection with regard to the adjustment of Cenvat Credit towards the duty liability for the period 2011-12. This leads to the strong inference that audit party did not find any short-payment of duty. Interestingly, the show-cause notice is issued after more than two years invoking the extended period alleging sup
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M/s. Maltanb Construction Engineers Pvt. Ltd. Versus Commissioner of GST & Central Excise Coimbatore
Service Tax
2019 (2) TMI 88 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
ST/ROM/40363 & 40364/2018 in ST/24 and 139/2011 – Misc. Order Nos. 40787 & 40788/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri G. Derrick Sam, Advocate for the Appellant
Shri K. Veerabhadra Reddy, Addl. Commr. (AR) for the Respondent
ORDER
Per Ms. Sulekha Beevi,
The above ROM applications have been filed by the appellant seeking to rectify the error alleged to be apparent inn Final Order No. 43445 & 43446/2017 dated 20.12.2017.
2. The ld. counsel Shri G. D
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rgued that though the service tax in respect of cleaning services rendered by the appellant to education institution was set aside, the cleaning services in respect of certain hospitals which are charitable institutions under the Income Tax Act have been upheld by the Tribunal for the normal period, which requires interference in these ROM applications.
3. The ld. AR Shri K. Veerabhadra Reddy opposed the applications.
4. Heard both sides.
5. The ld. counsel has adverted to our attention to para 6.1 of the impugned order and argued that the Tribunal has erroneously concluded that when fees are collected for treatment, they would become commercial building. It is pointed out by him that there are several decision which hold that mere charg
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me within the ambit of non-commercial entity. However, this depends upon facts of each case and the Tribunal after examining the facts of the case has made such observation and directed for re-examination of these facts on this issue.
6. From the discussions made above, we do not find any error apparent on the face of record that requires interference. An error apparent on the face of record should be so patent and also does not require any long drawn process of argument. In the present case, it is the conclusion or finding made by the Tribunal and is not an error apparent on the face of record. We do not find any ground to interfere in the impugned order. ROM dismissed.
(Operative portion of the order was pronounced in open Court)
Ca
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M/s. Siva Engineering Company Versus Commissioner of GST & Central Excise Coimbatore
Service Tax
2019 (2) TMI 87 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
Appeal No. ST/424/2012 – Final Order No. 43023/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri V.S. Manoj, Advocate for the Appellant
Ms. T. Usha Devi, DC (AR) for the Respondent
ORDER
Per Bench
The appellant is engaged in execution of works contract. They were engaged by Tamil Nadu Police Housing Corporation Ltd. (TNPHCL) which is a Government of Tamil Nadu company wherein 100% of the shares are held by Tamil Nadu Government for construction of police quarters. A show cause notice was issued to them proposing to demand service tax under the category of 'Construction of Residential Complex Service' for the period from February 2006 to February 2008. After due process of law, the original authority confirmed the demand,
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TR 815. That this Tribunal in the case of Commissioner of Central Excise Vs. Lanco Tanjore Power Co. Ltd. vide Final Order No. 40792 & 40793/2018 dated 16.3.2018 held that when construction activity is undertaken for personal use, the same is excluded from the definition of residential complex contained in Section 65(91a) of Finance Act, 1994. The appellants were engaged by TNPHCL to construct quarters for police personnel. The contract was awarded vide GO No. 576 dated 8.7.2005 issued by the Government of Tamil Nadu. Since the quarters were constructed for the use of police personnel, the same is outside the purview of definition of construction of residential complex, as it is covered by the Explanation to the said definition. The ownership of the houses constructed vests with the Government of Tamil Nadu who allots houses to police personnel. There is no profit motive involved in these transactions and there is no renting or letting of these quarters for commercial purposes. The lan
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idential complex is reproduced as under:-
As per section 65[(30a) of the Finance Act, 1994, „construction of complex‟ means :-
(a) construction of a new residential complex or a part thereof; or
(b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or
(c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex;]
As per Section 65(91a) of the Finance Act, 1994 „residential complex‟ means any complex comprising of:-
(i) a building or buildings, having more than twelve residential units;
(ii) a common area; and
(iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent
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ates (supra), wherein the Tribunal has observed as under:-
“7.1 In this case there is no dispute and it clearly emerges that the residential complex was built for M/s. ITC Ltd. and appellant was the main contractor. Appellant had appointed sub-contractors all of whom have paid the tax as required under the law. The question that arises is whether the appellant is liable to pay service tax in respect of the complex built for ITC. From the definition it is quite clear that if the complex is constructed by a person directly engaging any other person for design or planning or layout and such complex is intended for personal use as per the definition, service tax is not attracted. Personal use has been defined as permitting the complex for use as residence by another person on rent or without consideration. In this case what emerges is that ITC intended to provide the accommodation built to their own employees. Therefore it is covered by the definition of 'personal use' in the explanation.
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ract with GOI, engages a sub-contractor for carrying out the whole or part of the construction, then the sub- contractor would be liable to pay Service Tax as in that case, NBCC would be the service receiver and the construction would not be for their personal use.
It can be seen that if the land owner enters into a contract with a promoter/builder/developer who himself provided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax. It is quite clear that C.B.E.&C. also has clarified that in cases like this, service tax need not be paid by the builder/developer who has constructed the complex. If the builder/developer constructs the complex himself, there would be no liability of service tax at all. Further in this case it was different totally, the appellant, has engaged sub-contractors and therefore rightly all the sub-contractors have paid the service tax. In such a situation in our opinion,
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y or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person.
Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause,
(a) 'personal use' includes permitting the complex for use as residence by another person on rent or without consideration;
(b) 'residential unit' means a single house or a single apartment intended for use as a place of residence;
The above definition specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. We find that the above exclusion clause covers the construction activity undertaken by
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M/s. Interface Trade Fair Pvt. Ltd. Versus Commissioner of GST & Central Excise Coimbatore
Service Tax
2019 (2) TMI 86 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
Appeal No. ST/422/2012 – Final Order No. 43024/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
None for the Appellant
Shri B. Balamurugan, AC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are engaged in providing business exhibition service and it was noticed that they had not discharged the service tax on the consideration received. Show cause notice was issued demanding service tax of Rs. 99,659/- along with interest and also for imposing penalti
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t from 10.9.2004. They were under the confusion whether the exhibition conducted by them would fall under event management or business exhibition service. From October 2004 to December 2004, they had conducted two exhibitions at Madurai and Coimbatore. Service tax was not collected separately for the business exhibition service since the confusion existed and not paid to the Government. When the Preventive Unit visited the premises, as per the instructions, the appellants have paid the service tax. However, the quantification of service tax as per the show cause notice is erroneous and they are liable to pay service tax only to the tune of Rs. 76,078/- only after adjusting CENVAT credit of Rs. 14,405/-. It is also requested to waive the pen
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e introduced, with effect from 10.9.2004. They did not discharge the service tax for the reason of confusion as to the classification of service. On being instructed by the department in January 2005, they had remitted the service tax. It is also brought out that the appellants have not collected service tax separately and therefore the amount received should be considered as cum-tax value. The request of the appellant is reasonable and tenable. We therefore hold that the adjudicating authority shall requantify the service tax after giving the cum-tax benefit as well as the CENVAT credit benefit to the appellant. We are of the considered opinion that it is a fit case for invoking Section 80 of the Finance Act to set aside the penalties impo
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M/s. Vibgyor Printing and Packing P. Ltd. Versus Commissioner of GST & Central Excise Puducherry
Central Excise
2019 (2) TMI 78 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
Appeal No. E/40756/2018 – Final Order No. 43022/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Ms. S. Sridevi, Advocate for the Appellant
Shri L. Nandakumar, AC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are engaged in the manufacture of printed flexible packaging material. They filed refund claim of Rs. 6,85,366/- being the accumulated / unutilized CENVAT credit as they had closed down their manufacturing activity and surrender
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d their central excise registration, they are eligible for the accumulated credit. She relied upon the decision of the Hon'ble High Court of Karnataka in the case of Union of India Vs. Slovak Trading Co. Pvt. Ltd. – 2006 (201) ELT 559 (Kar.). That the appeal filed by the department against the said decision was dismissed as reported in 2008 (223) ELT A170 (SC).
3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order.
4. Heard both sides.
5. The issue is with regard to the refund of unutilized credit as the appellant had stopped the manufacturing activity. The Hon'ble High Court of Karnataka in the case of Slovak Trading Co. Pvt. Ltd. (supra) had occasion to analyze the very same issue and held that even though there
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Transition of Customs functions hitherto performed by the Central Excise/ GST officers, including the export procedure and sealing of Containerized export cargo, to the Customs formations, under the Commissioner of Customs, Pune
CORRIGENDUM TO TRADE NOTICE NO. 01/2018 Dated:- 20-11-2018 Trade Notice
Customs
OFFICE OF THE COMMISSIONER OF CUSTOMS
GST BHAVAN, 41/A, SASSON ROAD, PUNE-411001
F. No. VIII/Cus/Tech/Gst-Reorg/ 48-16/2017
Pune Dated: – 20.11.2018
CORRIGENDUM TO TRADE NOTICE NO. 01/2018
Sub: Transition of Customs functions hitherto performed by the Central Excise/ GST officers, including the export procedure and sealing of Containerized export cargo, to the Customs formations, under the Commissioner of Customs, Pune.
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M/s. Rakindo Kovai Township Ltd. Versus Commissioner of GST & Central Excise Chennai
Service Tax
2018 (12) TMI 1535 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 20-11-2018
ST/348/2011 And ST/334/2012 – 42918-42919 / 2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
For the Appellant : Shri K.S. Ravishankar, Advocate
For the Respondent : Shri A. Cletus, Addl. Commissioner (AR)
ORDER
PER BENCH
The appellant is a joint venture company formed in the year 2007 between Rakeen Pvt. Ltd. and Trimex Group Company to develop a township at Coimbatore. As a part of preparatory work for the development of the proposed township, the appellant engaged some of the foreign companies and got themselves registered under the category of Consulting Engineer Service for discharging service tax under reverse charge mechanism. The department was of the view that the appellants are not eligible to take credit of such ser
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rvice / construction of complex service. That the appellant had registered for their output service on works contract service only on 23.10.2009, and the credit availed being prior to this date is not eligible.
Show cause notice was issued proposing to recover the irregularly availed credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and also imposed penalties, against which the appellant has filed Appeal No. ST/348/2011.
3. On behalf of the appellant, ld. counsel Shri K.S. Ravikumar submitted oral as well as detailed written submissions, which can be broadly summarized as under:-
3.1 The appellant is registered under the category of consulting engineer service on 3.1.2008 and was discharging service tax on reverse charge basis for these services availed by them from the foreign company. Later, on 23.10.2009, it got registration certificate amended by including works contract service also. During the
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g up of factory / office premises is eligible to the appellant and therefore it is implied that even if the appellant has not started providing output services, it can avail credit on various input services. All the input services were availed as a precursor for providing the output service and therefore is eligible for credit.
3.2 With regard to the allegation that the service tax is paid under reverse charge mechanism for input services in the nature of consulting engineer service and is not eligible for credit, he relied upon the decision in the case of CST, Bangalore Vs. Arvind Fashions Ltd. – 2012 (25) STR 583 (Kar.) as well as the decision in Kansara Modler Ltd. Vs. Commissioner of Central Excise, Jaipur – 2013 (32) STR 209 (Tri. Del.).
3.3 It is also argued by the ld. counsel that even if the premises is not registered or even before obtaining registration for the output services, the appellant can avail credit. To support this argument, he relied upon the decision in the case
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nting of immovable property, survey, design, engineering, telecom service etc. are output services for the foreign company. Only if these are output services for the foreign company itself, the appellants are eligible for the credit on consulting engineer service.
4.1 With regard to the demand raised alleging that the appellant has not registered for output services of works contract services and therefore not eligible for credit to the tune of Rs. 1,58,89,282/-, he submitted that the input service were availed for construction of the township and therefore they are not eligible for credit.
5. Heard both sides.
6. The short issue that arises for consideration is whether the demand of Rs. 79,26,871/- alleging that the credit availed on consulting engineering service under reverse charge mechanism is eligible or not. The main ground for disallowing the credit is that the said services does not qualify as input services. The appellant has explained that these services were availed in o
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subscriber, policy holder or any other person, as the case may be, and the expressions “provider” and “provided” shall be construed accordingly;
(ii) Rule 2(q) – “person liable for paying service tax” has the meaning as assigned to it in clause (d) of sub-rule (1) of Rule 2 of the Service Tax Rules, 1994;
(iii) Rule 2(r) – “provider of taxable service” include a person liable for paying service tax;
Rule 2(1)(d)(iv) of Service Tax Rules.
(iv) in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under section 66A of the Act, the recipient of such service;
6. If we read Rule 2(q) of Cenvat Credit Rules with Rule 2(1)(d)(iv), we find that appellant is a person liable to Service Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules. Revenue is als
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for providing output service of works contract service only with effect from 23.10.2009. The department is of the view that they are eligible to take credit only from the date of registration. Needless to say that the definition of input service prior to 1.4.2011 included services like setting up of factory / office. From this it can be inferred that services which are needed to start providing output service for manufacturing finished products would be eligible for credit. The said issue has been sufficiently analyzed in various cases. The Hon'ble High Court of Karnataka in the case of Tavant Technologies Ltd. (supra) had followed the decision in mPortal Wireless Solutions Pvt. Ltd. – 2012 (27) STR 134 (Kar.) and held that for availing as well as refund of unutilized credit, registration of service tax is not required. There is no rule or statutory provision which makes registration a condition precedent for availing credit. Similar view was taken by the Tribunal in the case of Spand
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