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Service Tax - Exemption for services relating to transmission and distribution of electricity – Appellant received services relating to erection, commissioning, installation and dismantling of transmission towers, lines and substations, as well as construction and allied works at substations, through contractors - Demand of service tax on various services received by the appellant, such as works contract service, manpower supply service, and rent-a-cab service, under the reverse charge mechanism - Whether the services received by the appellant for the purpose of transmission and distribution of electricity are exempt fro... [Read more]

Service Tax - Exemption for services relating to transmission and distribution of electricity – Appellant received services relating to erection, commissioning, installation and dismantling of transmission towers, lines and substations, as well as construction and allied works at substations, through contractors - Demand of service tax on various services received by the appellant, such as works contract service, manpower supply service, and rent-a-cab service, under the reverse charge mechanism - Whether the services received by the appellant for the purpose of transmission and distribution of electricity are exempt from service tax – HELD – The Section 66D(k) of the Finance Act, 1994 excludes “transmission or distribution of electricity by an electricity transmission or distribution utility”, from service tax. While Section 66D(k) excludes transmission or distribution of electricity by a utility, it does not expressly extend the exclusion to direct or ancillary services. However, transmission or distribution of electricity cannot be done in a vacuum and require the involvement of a transmission or distribution system supported by direct or ancillary services in successfully undertaking the said service. The principle that tax relief provisions for public utility services should be broadly or liberally construed to advance the legislative intent of public benefit is well-established tax jurisprudence - The Gujarat High Court in Torrent Power Ltd. v. UoI and the Rajasthan High Court in Jodhpur Vidyut Vitran Nigam Ltd v. UoI, held that the expression "transmission and distribution of electricity" encompasses not only the core activity but also all direct and ancillary services having a proximate and integral nexus, without which transmission or distribution would not be possible or commercially impracticable - The Tribunal applied the "dependence test" to determine whether the impugned services are integrally connected with the entire process of transmission or distribution of electricity, without which such service would be impossible or commercially inexpedient. The works contract service and manpower supply service are directly related to the transmission and distribution of electricity and are therefore exempt. However, the rent-a-cab service does not have a direct and proximate nexus with the transmission or distribution of electricity and is therefore would not be exempted from the payment of tax on partial reverse charge basis - while the demand warrants to be dropped on merits in the case of ‘works contract service’ and ‘manpower service’, the SCN is time barred in the case of ‘rent-a-cab service’ - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Treatment of DTA to SEZ Supply as Deemed Exports - Requirement of submitting Bill of Export (BOE) as proof of export obligation discharge under EPCG scheme – Appellant supplied goods to a unit in the SEZ and sought export benefits under the EPCG scheme - DGFT rejected the claim on the ground of non-submission of BOEs - Whether supplies from DTA to SEZ are "deemed exports" under the Foreign Trade Policy and whether submission of supply invoices and Bank Realisation Certificates (BRCs) is sufficient to discharge the export obligation under the EPCG scheme, or BOEs are mandatorily required – HELD – The suppl... [Read more]

Customs – Treatment of DTA to SEZ Supply as Deemed Exports - Requirement of submitting Bill of Export (BOE) as proof of export obligation discharge under EPCG scheme – Appellant supplied goods to a unit in the SEZ and sought export benefits under the EPCG scheme - DGFT rejected the claim on the ground of non-submission of BOEs - Whether supplies from DTA to SEZ are "deemed exports" under the Foreign Trade Policy and whether submission of supply invoices and Bank Realisation Certificates (BRCs) is sufficient to discharge the export obligation under the EPCG scheme, or BOEs are mandatorily required – HELD – The supplies to an SEZ are not covered under any of the clauses of Para 8.2 of the Foreign Trade Policy, hence such supplies are not deemed exports. There is nothing, in Clause 8.2, to indicate that it is exhaustive of the categories of supplies which would qualify as deemed exports. While the categories of supplies enumerated in clauses (a) to (j) of Para 8.2 would unquestionably qualify as deemed exports, any other supply, which conforms to Para 8.1, would also so qualify - An SEZ is not located outside the country even if, for certain purposes, supplies to the SEZ are treated as “exports” under the SEZ Act. Therefore the supply by appellant to SEZ satisfy the description of “deemed exports”, as contained in para 8.1 - The supplies from DTA to SEZ units constitute "deemed exports" under the Foreign Trade Policy - The DGFT's contention that the SEZ Act and Rules override the FTP and HBP provisions is rejected as the SEZ Act and Rules primarily govern the functioning of SEZs and are not concerned with export incentives available to DTA units – The supply invoices accompanied by BRCs are sufficient evidence to discharge the export obligation under the EPCG scheme and BOEs are not mandatorily required. The DGFT's subsequent policy circular relaxed the BOE requirement for supplies to SEZs under the Advance Authorization scheme, and it would be unreasonable to deny EPCG benefits to the appellant merely for not submitting BOEs - The Review Petition filed by Union of India is dismissed [Read less]

Service Tax - Sponsorship Service, Sharing of advertisement expenses under ‘Co-op Partner Agreement’ - Appellant, engaged in sale of gold jewelry, entered into a Co-Op Partner Agreement with World Gold Council (WGC) to jointly promote sale of gold jewelry through media advertisements wherein the WGC agreed to share 25% of the total media expenses incurred by the appellant - Department of the view that the appellant providing "Sponsorship Service" to WGC and demanded service tax – HELD - The arrangement between the appellant and WGC does not amount to provision of any service, much less sponsorship service, by the app... [Read more]

Service Tax - Sponsorship Service, Sharing of advertisement expenses under ‘Co-op Partner Agreement’ - Appellant, engaged in sale of gold jewelry, entered into a Co-Op Partner Agreement with World Gold Council (WGC) to jointly promote sale of gold jewelry through media advertisements wherein the WGC agreed to share 25% of the total media expenses incurred by the appellant - Department of the view that the appellant providing "Sponsorship Service" to WGC and demanded service tax – HELD - The arrangement between the appellant and WGC does not amount to provision of any service, much less sponsorship service, by the appellant to WGC. The amount received by the appellant is not a consideration for any service but rather the share of expenses incurred for the promotional advertisement services availed from a third party - The fact that the Appellant is required to provide the invoice of the vendor who undertakes the activity of such promotion advertising in order for WGC to part with its contribution is indicative of the fact that the Appellant is not providing any service to WGC, rather the expenses incurred in such promotional advertising by engaging the services of a vendor who provides the service of advertisement, is merely being agreed to be shared - For a transaction to attract service tax, there must be an identifiable service provider and service receiver, with the transaction reflecting provision of a taxable service by the provider to the recipient for a consideration, which is absent in the present case - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Refund of excess Service Tax paid - The appellant paid excess service tax from December 2016 to May 2017 due to an inadvertent error – Rejection of refund on the ground that the refund claim was time barred under Section 11B of the Central Excise Act, 1944 – HELD - The excess service tax paid by the appellant was not in the nature of tax payable, but rather an inadvertent overpayment. Therefore, the limitation under Section 11B would not apply in the present case - In case of payment of tax made under mistake of law, the period of limitation as otherwise raised in terms of Section 11B of the Act would be ... [Read more]

Service Tax - Refund of excess Service Tax paid - The appellant paid excess service tax from December 2016 to May 2017 due to an inadvertent error – Rejection of refund on the ground that the refund claim was time barred under Section 11B of the Central Excise Act, 1944 – HELD - The excess service tax paid by the appellant was not in the nature of tax payable, but rather an inadvertent overpayment. Therefore, the limitation under Section 11B would not apply in the present case - In case of payment of tax made under mistake of law, the period of limitation as otherwise raised in terms of Section 11B of the Act would be inapplicable. The excess payment of service tax is an admitted fact, and this amount deposited in excess was by an inadvertent error, which the Govt cannot retain or withhold. Such claim, therefore, would not fall within legal parameters of Section 11B of the Act – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Appellant is a multimodal transporter booking and selling cargo space to customers contesting demand on reimbursable expenses and the freight margin arisen due to the difference between the price at which cargo space is booked by the appellant and the price at which it is offered to their customers - HELD - The Supreme Court in Union of India v Intercontinental Consultants and Technocrats Pvt Ltd has struck down Rule 5 as ultra vires Section 67 of the Finance Act, 1994, holding that Section 67 does not permit inclusion of reimbursable expenses in the value of taxable services – Further, the Section 67 which... [Read more]

Service Tax - Appellant is a multimodal transporter booking and selling cargo space to customers contesting demand on reimbursable expenses and the freight margin arisen due to the difference between the price at which cargo space is booked by the appellant and the price at which it is offered to their customers - HELD - The Supreme Court in Union of India v Intercontinental Consultants and Technocrats Pvt Ltd has struck down Rule 5 as ultra vires Section 67 of the Finance Act, 1994, holding that Section 67 does not permit inclusion of reimbursable expenses in the value of taxable services – Further, the Section 67 which deals with valuation of taxable services for charging service tax does not provide for inclusion of the aforesaid expenditure or cost incurred while providing the services as they cannot be treated as element/components of service, till the amendment to Section 67 made effective from May 14, 2015. Concededly, the period involved in the present Appeals are from 01-04-2013 to 31-03-2015, and hence the said decision would squarely apply, rendering the entire demand confirmed in the impugned order unsustainable – Regarding freight margins, the activity of booking and selling cargo space is a principal-to-principal transaction and the margin earned therein is not exigible to service tax - The appeals are allowed by setting aside the demands on reimbursable expenses and freight margins, and the penalties imposed [Read less]

GST - Statutory pre-deposit requirement for appeal against ex parte assessment orders – Petitioner challenged the ex parte assessment orders issued by the department, which resulted in a total demand of around Rs. 159 crore towards tax, interest and penalty. The petitioner claimed that it could not file a reply to the show cause notices as the relevant documents were not made available to it – The High Court declined to entertain the writ petition, directing the petitioner to prefer a statutory appeal by making a pre-deposit of 10% of the principal amount - The petitioner case that it was unable to make the pre-deposit... [Read more]

GST - Statutory pre-deposit requirement for appeal against ex parte assessment orders – Petitioner challenged the ex parte assessment orders issued by the department, which resulted in a total demand of around Rs. 159 crore towards tax, interest and penalty. The petitioner claimed that it could not file a reply to the show cause notices as the relevant documents were not made available to it – The High Court declined to entertain the writ petition, directing the petitioner to prefer a statutory appeal by making a pre-deposit of 10% of the principal amount - The petitioner case that it was unable to make the pre-deposit due to financial constraints – HELD - The petitioner is directed to deposit an amount of Rs. 3.50 crore with the department, and upon production of the receipt of deposit, the registry shall issue notice to the respondents. Since the petitioner has agreed to deposit the amount, no coercive steps shall be taken pursuant to the two assessment orders – Ordered accordingly [Read less]

GST – Rejection of appeal on ground of Jurisdiction — Procedural Transmission of Appeals - The Order-in-Original was passed in common against the petitioner having its offices at different parts of the country. So far as it related to the State of Odisha is concerned, the petitioner filed an appeal at Bhubaneswar - The Appellate Authority summarily rejected the appeal on the ground that it was filed in the "wrong jurisdiction." - HELD - The Revenue by written instructions acknowledging that at the time of the rejection, the departmental electronic system lacked the mechanism to transmit appeals to the correct jurisdict... [Read more]

GST – Rejection of appeal on ground of Jurisdiction — Procedural Transmission of Appeals - The Order-in-Original was passed in common against the petitioner having its offices at different parts of the country. So far as it related to the State of Odisha is concerned, the petitioner filed an appeal at Bhubaneswar - The Appellate Authority summarily rejected the appeal on the ground that it was filed in the "wrong jurisdiction." - HELD - The Revenue by written instructions acknowledging that at the time of the rejection, the departmental electronic system lacked the mechanism to transmit appeals to the correct jurisdictional office, although a subsequent administrative advisory was issued to address this procedural gap and facilitate such transfers - In light of subsequent advisory issued by the Directorate General of Systems, a framework for the transmission of such appeals now exists - In rejecting the appeal there was mistake on the part of the Revenue and the petitioner is advised to re-file the appeal - the appeal is restored to its original file and it is directed that the appeal as filed by the petitioner shall be transmitted to the appropriate appellate authority concerned – The petition is disposed of [Read less]

Central Excise - Eligibility of Cenvat credit of service tax paid on outward transportation from the place of removal, Cenvat credit on transporter's invoices – HELD - The definition of "Input service" as existing during the relevant time (i.e. prior to 01.04.2008) clearly indicates that the input service used by the manufacturer for clearance of final products from the place of removal was eligible for Cenvat credit - The Cenvat credit is available on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer. It was only subsequent to the amendment in the... [Read more]

Central Excise - Eligibility of Cenvat credit of service tax paid on outward transportation from the place of removal, Cenvat credit on transporter's invoices – HELD - The definition of "Input service" as existing during the relevant time (i.e. prior to 01.04.2008) clearly indicates that the input service used by the manufacturer for clearance of final products from the place of removal was eligible for Cenvat credit - The Cenvat credit is available on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer. It was only subsequent to the amendment in the definition of input service w.e.f. 01.04.2008, that the availment of Cenvat credit was restricted only upto the place of removal - Regarding Cenvat credit on transporter's invoices, since the transporter had paid service tax on 25% of the value by virtue of Notification No. 32/2004-ST dated 03.12.2004, the appellant is eligible for credit upto that percentage only. The non-payment of service tax on the remaining 75% of the taxable value under RCM by the appellant was not raised in the show cause notice. As the documents (transporter's invoices) are valid, the Cenvat credit cannot be disallowed to the appellant - the demand is held unsustainable on merits, there is no question of imposition of penally – The appeal is partly allowed [Read less]

Customs - Claiming exemption benefit under SAFTA Notification No. 99/2011-CUS at appellate stage - The appellant had imported instant ACT II Popcorn from Bangladesh, its subsidiary company but failed to claim the benefit of SAFTA exemption Notification No. 99/2011-CUS during the initial assessment. The Commissioner (Appeals) rejected the appellant's claim of the exemption benefit at the appellate stage on the grounds that the exemption benefit cannot be availed at the appellate stage and should have been availed at the time of clearance, and that the appeals are premature as the assessments were provisional and not finaliz... [Read more]

Customs - Claiming exemption benefit under SAFTA Notification No. 99/2011-CUS at appellate stage - The appellant had imported instant ACT II Popcorn from Bangladesh, its subsidiary company but failed to claim the benefit of SAFTA exemption Notification No. 99/2011-CUS during the initial assessment. The Commissioner (Appeals) rejected the appellant's claim of the exemption benefit at the appellate stage on the grounds that the exemption benefit cannot be availed at the appellate stage and should have been availed at the time of clearance, and that the appeals are premature as the assessments were provisional and not finalized - Whether the appellant is entitled to claim the SAFTA exemption benefit at the appellate stage, even though it was not claimed during the initial self-assessment of the Bills of Entry - HELD - The exemption benefit under the SAFTA Notification can be claimed by the appellant at any stage, including the appellate stage, as long as the eligibility conditions are met. There is no estoppel in law that if the appellant had carried out self-assessment without claiming the exemption, it was debarred from claiming the benefit later. It is obligatory on the authorities to ensure that appropriate legal benefit as admissible in law is granted even if the importer fails to claim the benefit of a particular Notification - The provisional assessment of the goods does not restrict the scope of re-assessment only to the valuation aspect, the authorities are required to consider the admissibility of the exemption benefit even at the time of finalization of the assessments. The exemption benefit can be claimed at the appellate stage, even if not claimed initially – The matter is remanded to the original authority, directing them to examine the admissibility of the SAFTA exemption Notification No. 99/2011-CUS to the instant case and, if admissible, to grant the same while carrying out the exercise of finalization of the impugned Bills of Entry - The appeal is disposed of by way of remand [Read less]

Central Excise - Classification of petroleum products - Prior to 13.05.1999, appellants were classifying all their products under CTH 3814.00 as Industrial Solvents. Later, they changed the classification and filed a declaration classifying Rishisol S-1, S-2, S-3 under CTH 2710.13 and Rishisol B-1 under CTH 2710.90 - Department issued show cause notices proposing classification of all four products under CTH 2710.13 and demanding differential duty - Whether the products Rishisol S-1, S-2, S-3 and Rishisol B-1 are correctly classifiable under CTH 2710.13 as "Motor spirit" or should be classified under other tariff headings ... [Read more]

Central Excise - Classification of petroleum products - Prior to 13.05.1999, appellants were classifying all their products under CTH 3814.00 as Industrial Solvents. Later, they changed the classification and filed a declaration classifying Rishisol S-1, S-2, S-3 under CTH 2710.13 and Rishisol B-1 under CTH 2710.90 - Department issued show cause notices proposing classification of all four products under CTH 2710.13 and demanding differential duty - Whether the products Rishisol S-1, S-2, S-3 and Rishisol B-1 are correctly classifiable under CTH 2710.13 as "Motor spirit" or should be classified under other tariff headings – HELD - For any product to be classified under the broad rubric of "Motor Spirit" under CTH 2710.13, it should satisfy three conditions: (a) being a hydrocarbon oil excluding crude mineral oil, (b) having flash point below 25 degree Celsius, and (c) being suitable for use as fuel in spark ignition engine, by itself or in admixture with any other substance - The technical expert's report opined that the products in question, though meeting conditions (a) and (b), were not found to be suitable for use as fuel in spark ignition engines, either by itself or in admixture with any other substance. The report stated that these products have low octane number, high vapor pressure and do not meet the distillation requirements for motor gasoline, and hence are not environment friendly or efficient for use in spark ignition engines - All the three conditions must be satisfied for classification under CTH 2710.13. Since the third condition was not met in the present case, the impugned order of the Commissioner (Appeals) classifying the products under tariff headings other than 2710.13 is upheld - The appeal of the Revenue is dismissed [Read less]

Service Tax – Assignment of employees to work to foreign group companies on the on-site working basis, Export of Service - Appellants assigned their employees to work from their foreign group companies on the on-site working basis and received salary, perquisites and commission of 15% in convertible foreign exchange. The revenue department held that the services were not used outside India and the appellants were liable to pay service tax under the category of manpower recruitment or supply agency services – HELD - The presence or absence of a written agreement is not a material factor to decide the nature of the agree... [Read more]

Service Tax – Assignment of employees to work to foreign group companies on the on-site working basis, Export of Service - Appellants assigned their employees to work from their foreign group companies on the on-site working basis and received salary, perquisites and commission of 15% in convertible foreign exchange. The revenue department held that the services were not used outside India and the appellants were liable to pay service tax under the category of manpower recruitment or supply agency services – HELD - The presence or absence of a written agreement is not a material factor to decide the nature of the agreement, as the agreement can be oral and based on mutual understanding. The mere fact that the services were rendered in India and the employees were physically present in India does not mean that the services were not used outside India. Service tax is a destination-based consumption tax and the location of the service recipient is the relevant factor, not the place of performance - In the instant case, the beneficiary of the services was located outside India and the consideration was received in convertible foreign exchange, indicating that the services were exported. The phrase “on-site” only indicates the place of working of the employees assigned by the appellants. It in no way conveys an understanding that the services rendered by the said assigned employees were used inside India. The appellants' claim of exporting the services cannot be brushed aside. The revenue failed to prove that the services were used in India and not used outside India - The impugned order is set aside and the appeal is allowed [Read less]

Bihar Value Added Tax Act, 2005 – Non-production of mandatory declaration form D-VII - The appellant's truck was intercepted at a check post while transporting a consignment of batteries. The authorities seized the truck as the driver failed to produce the mandatory "Suvidha D-VII" form as required under Section 60(2) of the Bihar VAT Act, 2005 - Whether the failure to produce the prescribed permit at the check post alone is sufficient to attract penalty under Section 60(4)(b) of the BVAT Act, even if the goods were being transported through Bihar without any intention to sell within the State – HELD - Under Section 60... [Read more]

Bihar Value Added Tax Act, 2005 – Non-production of mandatory declaration form D-VII - The appellant's truck was intercepted at a check post while transporting a consignment of batteries. The authorities seized the truck as the driver failed to produce the mandatory "Suvidha D-VII" form as required under Section 60(2) of the Bihar VAT Act, 2005 - Whether the failure to produce the prescribed permit at the check post alone is sufficient to attract penalty under Section 60(4)(b) of the BVAT Act, even if the goods were being transported through Bihar without any intention to sell within the State – HELD - Under Section 60(2) of the BVAT Act, every person transporting goods through State is required to file a correct and complete declaration in the prescribed form before crossing any check post. The absence of the mandatory "Suvidha D-VII" form creates a legal presumption under Section 62(1) that the goods were meant for sale within the State, regardless of the actual intention. The subsequent production of the Form after detention cannot cure the initial non-compliance. The imposition of penalty under Section 56(4)(b) is not contingent on any intention to evade tax, but is a strict liability provision for violation of the statutory requirements - The appeal is dismissed [Read less]

Service Tax - Demand for service tax based on information provided by the Income Tax Department - Whether the demand for service tax under Section 73(1) of the Finance Act, 1994 was valid when the appellant had already declared the value of taxable services and the tax liability in the ST-3 returns – HELD - Under Section 73(1B) of the Finance Act, 1994, if the amount of service tax payable has been self-assessed and declared in the ST-3 return, there is no need for the issuance of a notice under Section 73(1) for recovery of the same. The appellant had already filed the ST-3 returns for the concerned period, declaring th... [Read more]

Service Tax - Demand for service tax based on information provided by the Income Tax Department - Whether the demand for service tax under Section 73(1) of the Finance Act, 1994 was valid when the appellant had already declared the value of taxable services and the tax liability in the ST-3 returns – HELD - Under Section 73(1B) of the Finance Act, 1994, if the amount of service tax payable has been self-assessed and declared in the ST-3 return, there is no need for the issuance of a notice under Section 73(1) for recovery of the same. The appellant had already filed the ST-3 returns for the concerned period, declaring the value of taxable services and the corresponding tax liability, which matched with the information provided by the Income Tax Department. Therefore, the issuance of the notice under Section 73(1) was unwarranted and invalid in view of the provisions of Section 73(1B) – Further, the penalty under Section 77(1)(d) for late filing of ST-3 returns was also not imposable as there was a specific provision under Section 70(1) of the Finance Act, 1994 for payment of late fee - The demand for service tax under Section 73(1) and the penalty under Section 77(1)(d) are set aside and the appeal is allowed [Read less]

Service Tax demand based on financial records obtained from the Registrar of Companies - Whether the tax demand and penalties imposed on the appellant based solely on the financial statements, without proper identification of the taxable services, service recipients, and consideration received, are justified - HELD - The department had not made any efforts to identify the specific taxable services, service recipients, and corresponding consideration, and had instead resorted to estimation and extrapolation based on the financial statements. The high rates of growth applied to determine the tax liability, such as 490%, 250%... [Read more]

Service Tax demand based on financial records obtained from the Registrar of Companies - Whether the tax demand and penalties imposed on the appellant based solely on the financial statements, without proper identification of the taxable services, service recipients, and consideration received, are justified - HELD - The department had not made any efforts to identify the specific taxable services, service recipients, and corresponding consideration, and had instead resorted to estimation and extrapolation based on the financial statements. The high rates of growth applied to determine the tax liability, such as 490%, 250%, and 270% for certain years, appeared prima facie improbable – the appellants did not cooperate with the investigation have not filed any reply to the SCN and did not attend the personal hearing also. However, the same does not give any license to the authorities to fasten a tax demand of humungous proportions without identifying the service provided, the client and the consideration received - the fundamental principle of audi alteram partem (hear the other party) has not been followed by the ld. adjudicating authority; rather he was not in a position to follow the same as the appellants did not join the investigation. It would be a travesty of justice to confirm the tax demand as the Revenue, being the one who is making allegations, has not discharged their burden to prove the tax evasion along with evidence - The appellant is directed to submit its written reply and relevant documents in its defense, and the adjudicating authority to consider the same and pass a fresh order – The appeal is allowed by remand [Read less]

Service Tax - Eligibility of Cenvat Credit for "Renting of Immovable Property Service" (RIPS) despite change of ownership - The appellant had paid service tax under the 'Renting of Immovable Property Service' (RIPS). The appellant later sold the building thereby changing the ownership effective 18.06.2012. During the period 18.06.2012 to 30.06.2012, the appellant had collected the rent along with service tax from the tenant and paid the same to the new owner and availed Cenvat credit on the basis of the invoice raised by the new owner - Department denied the Cenvat credit on the ground that the appellant was not eligible f... [Read more]

Service Tax - Eligibility of Cenvat Credit for "Renting of Immovable Property Service" (RIPS) despite change of ownership - The appellant had paid service tax under the 'Renting of Immovable Property Service' (RIPS). The appellant later sold the building thereby changing the ownership effective 18.06.2012. During the period 18.06.2012 to 30.06.2012, the appellant had collected the rent along with service tax from the tenant and paid the same to the new owner and availed Cenvat credit on the basis of the invoice raised by the new owner - Department denied the Cenvat credit on the ground that the appellant was not eligible for the same as the services had no nexus with their output services - Whether the appellant is eligible for the Cenvat credit on the "Renting of Immovable Property Service" (RIPS) despite the change of ownership – HELD – Though the transfer of ownership apparently brings an end to the ownership of the Appellant from the date of registration / handing over the possession, however, the same may be insufficient to conclusively contend that by virtue of sale there was no landlord-tenant relationship between the Appellant and occupant - The ownership is not a pre-requisite for providing RIPS. The activities undertaken by the appellant between 18.06.2012 and 30.06.2012 would fall under 'RIPS' notwithstanding the fact of transfer of ownership. The appellant continued to provide uninterrupted services to the tenant under the same commercial arrangement, and the denial of Cenvat credit would result in cascading of tax and perhaps lead to double taxation of the same services - The eligibility of the appellant to the Cenvat credit on the rent for 'RIPS' is in order. The impugned order is set aside and the appeal is allowed [Read less]

Customs - Import of goods from Bhutan, Non-inclusion of insurance and freight values – Appellant, Custom House Agent (CHA), facilitated the import of goods by an importer from Bhutan - Show Cause Notice alleging that the insurance and freight values were not added while arriving at the assessable value - Whether the appellant can be held liable for not including the insurance and freight values - Invoking of extended period of limitation to issue the Show Cause Notice – HELD - The invoices raised by the overseas party did not mention whether the value was on FOB or CIF basis. Therefore, the appellant, being the CHA, co... [Read more]

Customs - Import of goods from Bhutan, Non-inclusion of insurance and freight values – Appellant, Custom House Agent (CHA), facilitated the import of goods by an importer from Bhutan - Show Cause Notice alleging that the insurance and freight values were not added while arriving at the assessable value - Whether the appellant can be held liable for not including the insurance and freight values - Invoking of extended period of limitation to issue the Show Cause Notice – HELD - The invoices raised by the overseas party did not mention whether the value was on FOB or CIF basis. Therefore, the appellant, being the CHA, could have had the bona fide belief that the invoices were reflecting the CIF value. There is no evidence brought on record by the Revenue to show that the appellant had indulged in any activity amounting to suppression or wilful mis-statement while filing the Bills of Entry - The Department was not justified in invoking the extended period of limitation to issue the Show Cause Notice, as no material facts were brought to show that the appellant had suppressed any details at the time of filing the Bills of Entry - The penalty imposed is set aside and the appeal is allowed [Read less]

Customs - Classification of imported goods 'Gurjon Oil' and 'Patchouli Oil' under Customs Tariff - Eligibility for concessional rate of Basic Customs Duty (BCD) - Differential IGST demand - Appellant imported 'Gurjon Oil' and 'Patchouli Oil' from Indonesia and claimed exemption from payment of BCD under Notification No. 46/2011-Cus. dated 01.06.2011 as amended by Notification No. 82/2018-Cus. dated 31.12.2018. However, during audit, authorities objected to the classification and demanded differential IGST between the rate adopted by the appellant (12%) and the rate as per the Revenue (18%) - Whether the appellant is eligib... [Read more]

Customs - Classification of imported goods 'Gurjon Oil' and 'Patchouli Oil' under Customs Tariff - Eligibility for concessional rate of Basic Customs Duty (BCD) - Differential IGST demand - Appellant imported 'Gurjon Oil' and 'Patchouli Oil' from Indonesia and claimed exemption from payment of BCD under Notification No. 46/2011-Cus. dated 01.06.2011 as amended by Notification No. 82/2018-Cus. dated 31.12.2018. However, during audit, authorities objected to the classification and demanded differential IGST between the rate adopted by the appellant (12%) and the rate as per the Revenue (18%) - Whether the appellant is eligible for the concessional rate of BCD and whether the demand for differential IGST is legally sustainable – HELD - The classification adopted by the appellant in respect of 'Gurjon Oil' and 'Patchouli Oil' is correct, as all goods covered under Chapter Heading 3301, irrespective of the sub-heading, would be eligible for the concessional rate of BCD – The appellant has claimed the exemption under CTH 33019079 and have submitted all the documents, including the certificate of analysis, invoice, etc., showing the country of origin as “Indonesia”. The Customs had cleared the goods only after being satisfied with the classification adopted by the appellant and the documentary evidence placed by them towards the country of origin - The demand of BCD and Surcharge on Welfare Services (SWS) are set aside as the Customs authorities had cleared the goods after being satisfied with the classification and documentary evidence provided by the appellant – The impugned order is set aside and the appeal is allowedrnIssue 2: Differential IGST demand - The appellant had paid IGST at 12% under a bonafide belief and had volunteered to pay the differential amount at 18%, with a request to allow filing of a Supplementary Bill of Entry to avail input tax credit, which was not considered by the authorities. Since the taking of IGST credit is an indefeasible right of the appellant when they use the inputs and the finished goods suffers Excise Duty / GST at the time of clearance from the appellant’s factory, the Audit/GST officials should have considered the request of the appellant - When the differential duty/tax accrues as credit to the assessee, it results in a revenue neutral situation, hence the demand is not legally sustainable. Accordingly, the demand for differential IGST is set aside [Read less]

Customs - Import of waste and metallic scrap - Validity of confiscation of imported goods and imposition of penalties - Appellants imported aluminum scrap from UAE through an indenter. The pre-shipment inspection certificates (PSIC) submitted for the import were found to be invalid as they were issued without proper inspection of the goods. The customs authorities confiscated the goods and imposed penalties on the appellants and other parties involved - Whether the confiscation of the imported goods and imposition of penalties on the appellants are sustainable – HELD – The non-compliance of the conditions for import po... [Read more]

Customs - Import of waste and metallic scrap - Validity of confiscation of imported goods and imposition of penalties - Appellants imported aluminum scrap from UAE through an indenter. The pre-shipment inspection certificates (PSIC) submitted for the import were found to be invalid as they were issued without proper inspection of the goods. The customs authorities confiscated the goods and imposed penalties on the appellants and other parties involved - Whether the confiscation of the imported goods and imposition of penalties on the appellants are sustainable – HELD – The non-compliance of the conditions for import policy may entail 100% inspection of goods but would not tantamount to improper import of goods liable to confiscation under Section 111 of the Customs Act, 1962 – The purpose of PSIC is to ensure that the consignment does not contain any types of arms, ammunition or other explosive material. As no such incriminating material was found in consignment, radiation level was not found in excess of neutral background, non-compliance of the condition of import policy may entail 100% inspection of goods but would not tantamount to improper import of goods liable to confiscation under Section 111 of the Customs Act, 1962 - There is no sufficient evidence to show that the appellants abetted in the production of invalid PSIC - the impugned order to the extent of confiscation of seized goods, imposition of Redemption fine and penalty on the appellants is set aside – The appeal is allowed [Read less]

Central Excise - Treatment of electricity generated in co-generation plant and wheeled out to electricity grid as exempted goods under CENVAT Credit Rules - The appellant, a manufacturer of sugar, denatured ethyl alcohol and bio-compost, operated a co-generation plant within the factory premises to generate electricity using bagasse, a waste product of the sugar manufacturing process. While a portion of the generated electricity was consumed captively, the surplus was wheeled out to the electricity grid - Department considered this surplus electricity as "exempted goods" under the CENVAT Credit Rules and demanded 6% of its... [Read more]

Central Excise - Treatment of electricity generated in co-generation plant and wheeled out to electricity grid as exempted goods under CENVAT Credit Rules - The appellant, a manufacturer of sugar, denatured ethyl alcohol and bio-compost, operated a co-generation plant within the factory premises to generate electricity using bagasse, a waste product of the sugar manufacturing process. While a portion of the generated electricity was consumed captively, the surplus was wheeled out to the electricity grid - Department considered this surplus electricity as "exempted goods" under the CENVAT Credit Rules and demanded 6% of its value under Rule 6(3)(i) on the ground that the appellant had not maintained separate accounts for common inputs and input services used for manufacturing activities and electricity generation – HELD - The electricity generated in the co-generation plant and wheeled out to the grid cannot be treated as an independent manufacturing activity attracting the provisions of Rule 6. The electricity generation was incidental to the sugar manufacturing process, and the appellant had already reversed the proportionate CENVAT credit attributable to the common input services used for electricity generation under Rule 6(3A). Once the proportionate credit was reversed, the appellant could not be compelled to pay 6% of the value of electricity under Rule 6(3)(i), as the object of the rule had been achieved – Further, the failure to intimate the Department about the exercise of the option under Rule 6(3A) was a mere procedural lapse and could not result in denial of the substantive benefit. Additionally, the demand is found to be time-barred under the normal limitation period prescribed under the CEA, 1944 - The impugned orders are set aside and the appeal is allowed [Read less]

Service Tax - Services provided to foreign educational institutions - Whether the services provided by the appellant to foreign educational institutions were taxable as intermediary services - HELD: The issue is no longer res integra, as in several decisions the Tribunal had held that the appellant's services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services – The appellant’s services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services - The demand confirmed and any penalty i... [Read more]

Service Tax - Services provided to foreign educational institutions - Whether the services provided by the appellant to foreign educational institutions were taxable as intermediary services - HELD: The issue is no longer res integra, as in several decisions the Tribunal had held that the appellant's services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services – The appellant’s services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services - The demand confirmed and any penalty imposed on the appellant on this account are set aside – The appeal is allowedrnIssue 2: Payment of service tax, interest, and penalty before show cause notice - Whether the proceedings stood concluded under the second proviso to Section 78 of the Finance Act, 1994 on payment of the service tax, interest and penalty before issuance of the show cause notice – HELD - The service tax along with interest and 15% as penalty deposited by the appellant during the investigations was sufficient compliance of the conditions laid down in Section 78 of the Finance Act, 1994, and consequently, the proceedings were deemed to have concluded. Accordingly, the demand in excess to the amount already paid by the appellant is set aside. [Read less]

Service Tax - CENVAT credit on recovery agent services - The appellant availed CENVAT credit of service tax paid under reverse charge on services provided by 'recovery agents' and reversed 50% of the credit monthly – With the amendment to the definition of "input service" with effect from 01.04.2011, it was alleged that recovery agent services were not used for providing the appellant's output service of money lending and therefore did not qualify as input services under Rule 2(l) of the CCR, 2004 - Whether the services of recovery agents, which are part of the loan recovery mechanism, have a direct and integral nexus wi... [Read more]

Service Tax - CENVAT credit on recovery agent services - The appellant availed CENVAT credit of service tax paid under reverse charge on services provided by 'recovery agents' and reversed 50% of the credit monthly – With the amendment to the definition of "input service" with effect from 01.04.2011, it was alleged that recovery agent services were not used for providing the appellant's output service of money lending and therefore did not qualify as input services under Rule 2(l) of the CCR, 2004 - Whether the services of recovery agents, which are part of the loan recovery mechanism, have a direct and integral nexus with the appellant's output service of money lending and are hence eligible to be availed as an 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD - The main definition, "input service" means any service used by a provider of taxable service for providing an output service. The test is whether the output service could practically be provided without the services provided by recovery agents. Timely recovery of loans is as critical for a non-banking financial company as for a bank. Delays lead to increased borrower liability, loss of alternative income, depreciation of collateral, potential capital loss, and liquidity stress that may threaten the lender's viability. Loan recovery is thus an integral part of the lending service, whether undertaken internally or through external agencies, enforcement of security, or legal proceedings. Money lending and recovery are two sides of a same service. There cannot be one without the other. Without an effective recovery mechanism, the output service of lending cannot be practically provided. Accordingly, services rendered by external collection agencies, which is part of the loan recovery mechanism, have a direct and integral nexus with the appellant's output service and are hence eligible to be availed as an 'input service' - The appellant is eligible for CENVAT credit on the services of recovery agents – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Enhancement of value for reconditioned and used digital multi-function devices - Whether the department is justified in rejecting the declared transaction value and enhancing it based on an expert’s report without conducting a market survey or following the sequential application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – HELD - The authorities failed to follow the mandatory sequential methodology prescribed under the Valuation Rules. Revenue primarily relied upon a chartered engineer's certificate which lacked a basis in current market surveys and failed to provide a ro... [Read more]

Customs - Enhancement of value for reconditioned and used digital multi-function devices - Whether the department is justified in rejecting the declared transaction value and enhancing it based on an expert’s report without conducting a market survey or following the sequential application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – HELD - The authorities failed to follow the mandatory sequential methodology prescribed under the Valuation Rules. Revenue primarily relied upon a chartered engineer's certificate which lacked a basis in current market surveys and failed to provide a robust comparison with identical or similar goods - In cases of second-hand capital goods, the department cannot unilaterally discard the transaction value without establishing its inaccuracy through evidence that aligns with the statutory rules. Following the ratio of the appellant’s own previous case and established judicial precedents, it is held that the rejection of the transaction value is invalid due to the absence of market-based evidence and the failure of the lower authorities to justify the specific Rule under which the value was re-determined. The revision of value is set aside for want of evidence and the declared value is accepted – The enhancement of the value is set aside and the redemption fine and penalty are reduced – The appeal is partly allowed - Confiscation and Redemption - Quantum of fine and penalty for restricted imports - Whether the authorities were correct in restricting redemption to re-export only and whether the quantum of the redemption fine and penalty imposed was excessive for the import of restricted, as opposed to prohibited, goods – HELD - There exists a fundamental distinction between "prohibited" and "restricted" goods under the Customs Act. For restricted items such as used multi-function devices, which possess certified residual utility and are not expressly prohibited for importation, the adjudicating authority is obliged to offer the owner an option to pay a fine in lieu of confiscation for home consumption - the consistent judicial practice for such restricted imports is to fix the redemption fine and penalty at a specific percentage of the assessable value to ensure uniformity and justice. Accordingly, the redemption fine should be limited to ten percent and the penalty to five percent of the assessable value - Redemption fine reduced to 10% and penalty reduced to 5% of the assessable value. [Read less]

Customs AAR - Leviability of 5% IGST on imports of Active Pharmaceutical Ingredients (APIs) or Bulk drugs in terms of Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) – Whether bulk drugs/APIs are covered under the expression ‘All Drugs and Medicines’ - HELD – Bulk Drugs/APIs falls within the statutory meaning of “drug”. The bulk drugs and APIs imported by applicant, whether for manufacturing formulations, testing, clinical trials, bioavailability, or bioequivalence studies, qualify as "All Drugs" under Sl. No. 226 of Schedule I to Notification No. 9/2025-IT (Rate) dated September 17, ... [Read more]

Customs AAR - Leviability of 5% IGST on imports of Active Pharmaceutical Ingredients (APIs) or Bulk drugs in terms of Sl. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) – Whether bulk drugs/APIs are covered under the expression ‘All Drugs and Medicines’ - HELD – Bulk Drugs/APIs falls within the statutory meaning of “drug”. The bulk drugs and APIs imported by applicant, whether for manufacturing formulations, testing, clinical trials, bioavailability, or bioequivalence studies, qualify as "All Drugs" under Sl. No. 226 of Schedule I to Notification No. 9/2025-IT (Rate) dated September 17, 2025 attracting 5% IGST, provided they are not covered under Sl. No. 113 of Notification No. 10/2025–Integrated Tax (Rate), which lists NIL-rated drugs or medicines – Ordered accordingly [Read less]

GST - Violation of principles of natural justice, opportunity of hearing - Petitioner had challenged the adjudication order on the grounds of violation of principles of natural justice and not being provided timely opportunity to file replies and request for personal hearing - The Appellate Authority rejected the appeal merely on the ground that the petitioner did not remain present for the personal hearing opportunity provided - Whether the Appellate Authority can reject the appeal solely on the ground of non-appearance of the petitioner at the personal hearing – HELD - The Appellate Authority has committed an illegalit... [Read more]

GST - Violation of principles of natural justice, opportunity of hearing - Petitioner had challenged the adjudication order on the grounds of violation of principles of natural justice and not being provided timely opportunity to file replies and request for personal hearing - The Appellate Authority rejected the appeal merely on the ground that the petitioner did not remain present for the personal hearing opportunity provided - Whether the Appellate Authority can reject the appeal solely on the ground of non-appearance of the petitioner at the personal hearing – HELD - The Appellate Authority has committed an illegality by not dealing with the submissions raised by the petitioner in the appeal memo, even though the petitioner did not remain present for the personal hearing. The Appellate Authority was always open to pass a reasoned order by addressing the grounds raised in the appeal memo, irrespective of the petitioner's non-appearance - The principles of natural justice required the Appellate Authority to consider the petitioner's contentions regarding violation of principles of natural justice and denial of opportunity to file replies and seek personal hearing - The Appellate Order is quashed and the matter is remanded back to the Appellate Authority to decide the appeal afresh after providing the petitioner an opportunity of hearing and dealing with the grounds raised in the appeal memo in accordance with law - The writ petition is allowed [Read less]

GST - Scope of Supply - Levy of GST on regulatory functions discharged by CERC – Review petition by DGGI seeking review of order dismissing Special Leave Petitions preferred by DGGI – HELD - No case for review is made out. Consequently, the review petitions are dismissed on the ground of delay as well as on merits

Service Tax – 100% EOU, Refund of unutilised Cenvat credit - Appellant claimed refund of unutilized Cenvat credit on various input services used for providing output services. The refund claims were partially rejected by the Adjudicating Authority - Whether the denial of refund of Cenvat credit relating to various input services received by the appellant was correct – HELD - The definition of 'input services' during the relevant period had a wide ambit and included "activities relating to business". The lower authorities had not provided any reasoning for treating these services as ineligible input services, despite th... [Read more]

Service Tax – 100% EOU, Refund of unutilised Cenvat credit - Appellant claimed refund of unutilized Cenvat credit on various input services used for providing output services. The refund claims were partially rejected by the Adjudicating Authority - Whether the denial of refund of Cenvat credit relating to various input services received by the appellant was correct – HELD - The definition of 'input services' during the relevant period had a wide ambit and included "activities relating to business". The lower authorities had not provided any reasoning for treating these services as ineligible input services, despite the nature of the appellant's business as a 100% export-oriented BPO/Call Centre. The dichotomous findings of the lower authorities on the non-submission of invoices are unsustainable, especially when the appellant had submitted a Chartered Accountant's certificate in support of its refund claim – The appellant is eligible for refund on input services such as rent-a-cab, insurance, and architectural services – the impugned Orders-in-Appeal, to the extent it disallow the refund claim are unsustainable and set aside. The matter is remanded to the jurisdictional Original Authority only for the limited purpose of redetermining the quantum of refund to which the appellant is entitled and to sanction the same along with interest as entitled in law – The appeal is allowed - Whether the Appellate Authority erred in holding that the formula adopted by the refund sanctioning authority was correct – HELD – There is no merits in the plea of the appellant that the refund Notification No.5/2006-CE (NT) dated 14-03-2006 does not deny refund of input services relating to exports done by an SEZ unit and that therefore the service exported from SEZ unit should be included in the ‘total turnover’ as well as 'export turnover’ of the formula prescribed in the Refund Notification - On the other hand, concur with the alternate plea of the Appellant, that the Notification No.5/2006-CE (NT) dated 14-03-2006 specifically provides that the refund of Cenvat credit is to be determined based on the ratio of export turnover to the total turnover of the registered premises from which the output services are exported. Since the appellant maintains separate accounts for its STPI and SEZ units, the total turnover and export turnover for the purpose of the formula should be confined to the STPI unit's turnover, without including the SEZ unit's turnover. [Read less]

GST - Challenge to Notifications extending time limit to determine tax, interest and penalty under under Section 73(10) of the CGST Act, 2017 - The High Court disposed of the Writ Petitions, observing that the issues raised were pending consideration before the Supreme Court – The assessee filed Special Leave Petitions before the Supreme Court challenging the High Court's order – HELD – The petitioner seeks that it may be permitted to prefer an appropriate appeal in so far as the assessment orders are concerned - In similar matters, the High Court had permitted the assessees to challenge the assessment orders by pref... [Read more]

GST - Challenge to Notifications extending time limit to determine tax, interest and penalty under under Section 73(10) of the CGST Act, 2017 - The High Court disposed of the Writ Petitions, observing that the issues raised were pending consideration before the Supreme Court – The assessee filed Special Leave Petitions before the Supreme Court challenging the High Court's order – HELD – The petitioner seeks that it may be permitted to prefer an appropriate appeal in so far as the assessment orders are concerned - In similar matters, the High Court had permitted the assessees to challenge the assessment orders by preferring appropriate statutory appeals and granted time for the same – The petitioner is permitted to prefer the statutory appeal before the Appellate Authority. The decision of the Appellate Authority shall be subject to the adjudication of the Supreme Court in so far as the legality and validity of the two Notifications are concerned – The petition is disposed of [Read less]

GST – Tamil Nadu AAR - Eligibility of Input Tax Credit on Leasing/Renting/Hiring of Motor Vehicles for Transportation of Women Employees - The applicant procures services of leasing/renting/hiring of motor vehicles for passenger transportation and provides the same to its women employees working in shifts - Whether the tax paid on input services in respect of leasing/renting/hiring of motor vehicles to provide transportation facility to ensure safety and security of women employees as per Tamil Nadu Shops and Establishments Act, 1947 is eligible to be availed as input tax credit – HELD - The provisions of Section 17(5)... [Read more]

GST – Tamil Nadu AAR - Eligibility of Input Tax Credit on Leasing/Renting/Hiring of Motor Vehicles for Transportation of Women Employees - The applicant procures services of leasing/renting/hiring of motor vehicles for passenger transportation and provides the same to its women employees working in shifts - Whether the tax paid on input services in respect of leasing/renting/hiring of motor vehicles to provide transportation facility to ensure safety and security of women employees as per Tamil Nadu Shops and Establishments Act, 1947 is eligible to be availed as input tax credit – HELD - The provisions of Section 17(5)(b) of the CGST Act, 2017 provides that the input tax credit in respect of such goods or services shall be available where it is obligatory for an employer to provide the same to its employees under any law for the time being in force - As per the provisions of the Tamil Nadu Shops and Establishment Act 1947, it is obligatory on the part of the applicant to provide transport facilities to women employees working beyond 8.00 PM. Since the Tamil Nadu Shops and Establishment Act, 1947 makes it obligatory for the applicant to provide transportation facilities to women employees working in shifts, the input tax credit on the leasing/renting/hiring of motor vehicles for this purpose is eligible to be availed by the applicant – The applicant is eligible to avail input tax credit on the services of leasing/renting/hiring of motor vehicles to provide transportation facility to ensure safety and security of women employees as per the Tamil Nadu Shops and Establishments Act, 1947 - Whether the entire ITC be availed by the applicant for providing the transport facility in all shifts considering the safety of women as mandated under the Tamil Nadu Shops and Establishment Act, 1947 – HELD – The input tax credit shall be available to the applicant only on the tax paid on services of leasing, renting or hiring of motor vehicles for providing transport facilities to women employees who are arriving or leaving the workplace between 8:00 PM to 6:00 AM, as this has been made obligatory under the Notification of the Government of Tamil Nadu. The input tax credit cannot be availed for the transportation of male employees or women employees not working in the specified night shift - If eligible, can ITC be availed for services received from the date of introduction of proviso to Section 17(5)(b)(iii) of CGST Act, 2017 – HELD - The input tax credit on leasing, renting or hiring of motor vehicles meant for transportation of women employees between 8:00 PM to 6:00 AM shall be available to the applicant from 28.05.2019 onwards, which was the date of the original Notification issued by the Government of Tamil Nadu making it obligatory on employers to provide transportation facilities to women employees working in shifts. The provisions of Section 17(5)(b) of the CGST Act, as amended, came into effect from 01.02.2019, but the obligation was mandated on employers earlier by the Government of Tamil Nadu. The availment of such ITC shall be subject to satisfying and fulfilling the eligibility and conditions as stipulated under Section 16 of the CGST Act, 2017, including the time limit for availing ITC prescribed under Section 16(4) of the Act. [Read less]

GST – Tamil Nadu AAR - Business activities of medical association - Whether the activities of a medical association, such as conducting free health camps and organizing seminars for members, would be considered as 'business' under Section 2(17)(e) of the CGST Act, 2017, even though the ultimate objective is to provide healthcare services, which are otherwise exempt; and whether the subscription fees collected from members would be treated as 'supply' under Section 7(1)(aa) of the CGST Act, 2017 - HELD - The activities involve the provision of facilities or benefits by an association to its members for a subscription or o... [Read more]

GST – Tamil Nadu AAR - Business activities of medical association - Whether the activities of a medical association, such as conducting free health camps and organizing seminars for members, would be considered as 'business' under Section 2(17)(e) of the CGST Act, 2017, even though the ultimate objective is to provide healthcare services, which are otherwise exempt; and whether the subscription fees collected from members would be treated as 'supply' under Section 7(1)(aa) of the CGST Act, 2017 - HELD - The activities involve the provision of facilities or benefits by an association to its members for a subscription or other consideration, falls within the definition of 'business' under the Act - The activities of the medical association, specifically the collection of subscription and provision of services to its members, and the organization of educational seminars and workshops for its members, would be considered as 'business' under Section 2(17)(e) of the CGST Act, 2017 – The activities in relation to collection of subscription and providing services to its members, and organizing educational seminars and workshops for its members who are doctors, are to be treated as ‘supply’ under section 7(1)(aa) of the CGST Act, 2017. Exclusion under the ground of principles of mutuality do not apply to the instant case, in view of the Explanation annexed to Section 7(1)(aa) of the CGST Act, 2017, whereby the body and its members are deemed as two separate persons - Ordered accordingly [Read less]

GST – Show Cause Notice lacking requisite particulars, opportunity of hearing – Demand of tax on the ground of excess availment of ITC – HELD - The show-cause notice was bereft of requisite particulars, depriving the petitioner of an effective opportunity to rebut the allegations. The adjudication orders were in contravention of Section 75(6) of the CGST Act, as they lacked the relevant facts and basis for the conclusion. Further, the orders were passed without affording the petitioner any opportunity of hearing as required under Section 75(4) - The subsequent order the petitioner's reply and stating that no further ... [Read more]

GST – Show Cause Notice lacking requisite particulars, opportunity of hearing – Demand of tax on the ground of excess availment of ITC – HELD - The show-cause notice was bereft of requisite particulars, depriving the petitioner of an effective opportunity to rebut the allegations. The adjudication orders were in contravention of Section 75(6) of the CGST Act, as they lacked the relevant facts and basis for the conclusion. Further, the orders were passed without affording the petitioner any opportunity of hearing as required under Section 75(4) - The subsequent order the petitioner's reply and stating that no further action was required, was also without jurisdiction as the adjudicating authority had become functus officio after passing the earlier orders. Accordingly, both the adjudication orders are set aside. The notice issuing authority is directed to provide all relevant particulars to the petitioner, who shall be entitled to file a reply in accordance with law. The amount debited from the petitioner's electronic credit ledger is directed to be reversed and re-credited within two weeks - The writ petition is disposed of [Read less]

GST – Tamil Nadu AAR - Composite Supply of Healthcare Services - The applicant, a multi-specialty hospital, provides healthcare services to in-patients, which includes the supply of medicines and consumables as part of the treatment - Whether the supply of medicines and consumables to in-patients would be considered a "Composite Supply of Healthcare Service" and consequently exempt from GST – HELD - The supply of medicines and consumables used in the course of providing healthcare services to in-patients by the hospital's pharmacy unit is a composite supply, where the principal supply is the healthcare services – The... [Read more]

GST – Tamil Nadu AAR - Composite Supply of Healthcare Services - The applicant, a multi-specialty hospital, provides healthcare services to in-patients, which includes the supply of medicines and consumables as part of the treatment - Whether the supply of medicines and consumables to in-patients would be considered a "Composite Supply of Healthcare Service" and consequently exempt from GST – HELD - The supply of medicines and consumables used in the course of providing healthcare services to in-patients by the hospital's pharmacy unit is a composite supply, where the principal supply is the healthcare services – The "Inpatient Services" provided by hospitals, including the medical, pharmaceutical and para-medical services, are specifically covered under the Scheme of Classification of Services and are exempt from GST under Notification No. 12/2017, CT (Rate) - Further, the entire amount charged by hospitals from patients, including the fee/payments made to doctors and the cost of medicines and consumables, is towards the healthcare services provided - The supply of medicines and consumables used in the course of providing healthcare services to in-patients by the hospital's pharmacy unit is exempt from GST as the same is a composite supply of healthcare services – Ordered accordingly [Read less]

GST – Tamil Nadu AAR - Value of Taxable Supply for export under DDP terms - The applicant, a garment manufacturer, exports goods under Delivered Duty Paid (DDP) terms, where the supplier undertakes to deliver the goods at the doorstep of the recipient and assumes responsibility to bear all costs until the goods reach their destination - Whether the transaction value for the export of goods under DDP terms should include the reimbursed expenses such as ocean freight, insurance, foreign import duties, delivery charges, and other costs incurred abroad until the goods reach their destination, and whether IGST should be paid ... [Read more]

GST – Tamil Nadu AAR - Value of Taxable Supply for export under DDP terms - The applicant, a garment manufacturer, exports goods under Delivered Duty Paid (DDP) terms, where the supplier undertakes to deliver the goods at the doorstep of the recipient and assumes responsibility to bear all costs until the goods reach their destination - Whether the transaction value for the export of goods under DDP terms should include the reimbursed expenses such as ocean freight, insurance, foreign import duties, delivery charges, and other costs incurred abroad until the goods reach their destination, and whether IGST should be paid on these expenses – HELD - As per the provisions of Section 15(1) of the CGST Act, 2017, the value of taxable supply shall be the 'transaction value' which is the price actually paid or payable for the said supply, where the supplier and the recipient are not related, and the price is the sole consideration for the supply. Further, as per Section 15(2)(c) of the Act, the 'incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services', are liable to be included in the value of supply - In the instant case, under the DDP model, the responsibility for delivery of goods, including all costs and risks until the goods reach the buyer's designated location, is with the applicant, and the applicant absorbs all the expenses. Therefore, all such charges, including the reimbursed expenses, are liable to be included in the value of taxable supply for the purpose of payment of IGST on export of goods - All the expenses incurred by the applicant under DDP terms until the goods reach the buyer's destination, including the expenses of reimbursable nature, are liable to be included in the value of taxable supply for the purpose of payment of IGST on export of goods in terms of Section 15 of the CGST Act, 2017, read with Section 20 of the IGST Act, 2017 – Ordered accordingly [Read less]

GST - Violation of principles of natural justice – SCN issued demanding reversal of ITC and payment of tax - Assessee’s case that the show cause notice itself is illegal and without jurisdiction and vague - HELD - Though the Order-in-Original would indicate that the notice was served, there is no material available on record of such service of show cause notice on the assessee, this amounts to violation of the principles of natural justice - Insofar as the contentions with regard to the SCN being vague and without application of mind is concerned, the said contention is devoid of merits - Reserving liberty to the appel... [Read more]

GST - Violation of principles of natural justice – SCN issued demanding reversal of ITC and payment of tax - Assessee’s case that the show cause notice itself is illegal and without jurisdiction and vague - HELD - Though the Order-in-Original would indicate that the notice was served, there is no material available on record of such service of show cause notice on the assessee, this amounts to violation of the principles of natural justice - Insofar as the contentions with regard to the SCN being vague and without application of mind is concerned, the said contention is devoid of merits - Reserving liberty to the appellant to submit reply to the show cause notice and also reserving liberty to the assessing officer to adjudicate the same and pass an order afresh, the appeal is allowed by setting aside the impugned order to the limited extent - The appellant is precluded from raising the plea of the show cause notice being either vague or without application of mind or not containing the material particulars. The issue of jurisdiction, if any, raised in the reply to the show cause notice, would be open to examination or consideration by the assessing officer - The appeal is partly allowed by remand [Read less]