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GST - Transitional credit under Section 140 of the CGST Act, 2017 - Jurisdiction of CGST authorities to initiate proceedings under Section 73 for recovery of allegedly inadmissible CENVAT credit carried forward through Form GST TRAN-1 - Appellant carried forward CENVAT credit and claimed unavailed credit on capital goods, and on scrutiny the Revenue alleged excess transitional credit, the revised return filed manually under the earlier law not having been reflected in the system - Demand was confirmed under Section 73 with interest and penalty, and FAA gave partial relief on the capital goods credit but upheld the rest - A... [Read more]

GST - Transitional credit under Section 140 of the CGST Act, 2017 - Jurisdiction of CGST authorities to initiate proceedings under Section 73 for recovery of allegedly inadmissible CENVAT credit carried forward through Form GST TRAN-1 - Appellant carried forward CENVAT credit and claimed unavailed credit on capital goods, and on scrutiny the Revenue alleged excess transitional credit, the revised return filed manually under the earlier law not having been reflected in the system - Demand was confirmed under Section 73 with interest and penalty, and FAA gave partial relief on the capital goods credit but upheld the rest - Appellant contended that eligibility to avail CENVAT credit of the earlier regime cannot be disputed in proceedings under Section 73, while Revenue relied on Rule 121 which provides for verification of transitional credit and initiation of proceedings under Section 73 or 74 - Whether the CGST authorities have jurisdiction to proceed under Section 73 to recover such credit - HELD - A jurisdictional issue must be decided first, as an order passed without jurisdiction over the subject matter is a nullity and the defect cannot be cured by consent. The Jharkhand High Court in Usha Martin Limited case held that Section 73 does not speak of CENVAT credit, that whether credit was admissible under the existing law was not an issue within the jurisdiction of the CGST authorities, and that under the savings clause in Section 174 proceedings for such contravention must be initiated under the existing law, since parallel proceedings under two laws cannot be countenanced - The Calcutta High Court in a similar situation quashed a notice under Section 73 for want of jurisdiction while granting liberty to proceed under the existing law. The Revenue made only a bald assertion that the earlier decision was distinguishable without showing how the legal issue differed - The legal issues are squarely covered by these decisions, proceedings under the CGST Act for recovery of allegedly inadmissible CENVAT credit are not legally sustainable for inherent lack of jurisdiction - The order of the FAA is set aside and the appeal is allowed. [Read less]

GST - Refund of unutilised Input Tax Credit on zero-rated supplies under Section 54 of the CGST Act, 2017 read with Rule 89(4) of the CGST Rules, 2017 - Appellant claimed refund for supplies made to SEZ unit or developer without payment of tax, but the supplies were not disclosed in the outward supply statement - Proper officer treated the zero-rated turnover of goods as nil and rejected the claim, which was upheld by the FAA - Appellant contended that it held all tax invoices, SEZ endorsements and export documents, while Revenue submitted that consistency of aggregate turnover does not establish the character of each indi... [Read more]

GST - Refund of unutilised Input Tax Credit on zero-rated supplies under Section 54 of the CGST Act, 2017 read with Rule 89(4) of the CGST Rules, 2017 - Appellant claimed refund for supplies made to SEZ unit or developer without payment of tax, but the supplies were not disclosed in the outward supply statement - Proper officer treated the zero-rated turnover of goods as nil and rejected the claim, which was upheld by the FAA - Appellant contended that it held all tax invoices, SEZ endorsements and export documents, while Revenue submitted that consistency of aggregate turnover does not establish the character of each individual supply - Whether the refund claim is admissible or the matter requires fresh examination - HELD - Zero-rated supply includes export and supply to an SEZ developer or unit for authorised operations, and the formula in Rule 89(4) makes it abundantly clear that a taxpayer must correctly report zero-rated supply in the return and provide a correct break-up in the outward supply statement, with details of supplies to SEZ also required in the annual return - The Appellant showed gross negligence in omitting the purported SEZ supplies from the outward supply statement and the annual return. The case involves disputed questions of fact, the FAA having recorded that the mandatory documents were not submitted, and requires reconciliation of the discrepancies in the turnover of supplies to SEZ - The order of the FAA is set aside and the matter is remanded to the proper officer for re-examination of the refund claim, with direction to the Appellant to submit invoice-wise reconciliation, copies of tax invoices and shipping bills, endorsements by the specified officer and the letter of undertaking - The proper officer to pass a speaking order after hearing in accordance with Rule 92 – The appeal is disposed of [Read less]

GST - Invocation of extended period under Section 74(1) of the CGST Act, 2017 in the absence of fraud, wilful misstatement or suppression - Appellant supplied goods of two categories, and on audit a notice under Section 74 was issued for three financial years alleging short payment of tax on supplies detected in the profit and loss account but not declared in the returns, among other objections - Entire demand was confirmed with interest and penalty, and Appellant paid the tax before the notice, disputing only the invocation of Section 74 - FAA dropped interest and penalty for the first year since the accounts had been upl... [Read more]

GST - Invocation of extended period under Section 74(1) of the CGST Act, 2017 in the absence of fraud, wilful misstatement or suppression - Appellant supplied goods of two categories, and on audit a notice under Section 74 was issued for three financial years alleging short payment of tax on supplies detected in the profit and loss account but not declared in the returns, among other objections - Entire demand was confirmed with interest and penalty, and Appellant paid the tax before the notice, disputing only the invocation of Section 74 - FAA dropped interest and penalty for the first year since the accounts had been uploaded and no suppression was established, but upheld them for the other two years on the ground that the records were not available with the department before audit - Whether proceedings under Section 74 are tenable for the subsequent two years - HELD - Proceedings under Sections 73 and 74 can be initiated only on the satisfaction of the Assessing Officer, and for a notice under Section 74 the officer must be satisfied that fraud, wilful misrepresentation or suppression led to the short payment, the foundational facts for which must be evident from the notice and not mechanically recited - The Appellant had not filed the annual reconciliation statement owing to an exemption based on aggregate turnover, a plea not objected to by the Revenue. The discrepancy was detected solely from documents prepared and produced by the Appellant, no incriminating material was found - Not discharging liability before audit does not necessarily mean wilful suppression, as action under Section 74 requires definite evidential support forming part of the notice in terms of the Board instruction. The reasoning of the FAA for the first year therefore holds equally good for the subsequent two years - Proceedings under Section 74 are not tenable and are quashed, the Revenue is precluded from taking action for the first year being time barred, the order of the FAA for the other two years is set aside - The matter is remanded to the proper officer to determine the tax afresh under Section 75(2) deeming the notice to be issued under Section 73(1) with liberty to the appellant to approach the officer for the benefit under Section 128A – The appeal is disposed of [Read less]

GST - Refund of pre-deposit made for filing an appeal against a service tax demand - Applicability of the two-year limitation under Section 54(1) of the CGST Act, 2017 - Respondent, unable to pay the statutory pre-deposit through the legacy portal owing to login issues, paid it through Form DRC-03 from the electronic cash ledger, later paid it again through the proper channel, and after the service tax demand was set aside, claimed refund of the amount paid through DRC-03 - Refund claim was rejected as time barred since it was filed more than two years from the date of payment - FAA allowed the refund and Revenue appealed ... [Read more]

GST - Refund of pre-deposit made for filing an appeal against a service tax demand - Applicability of the two-year limitation under Section 54(1) of the CGST Act, 2017 - Respondent, unable to pay the statutory pre-deposit through the legacy portal owing to login issues, paid it through Form DRC-03 from the electronic cash ledger, later paid it again through the proper channel, and after the service tax demand was set aside, claimed refund of the amount paid through DRC-03 - Refund claim was rejected as time barred since it was filed more than two years from the date of payment - FAA allowed the refund and Revenue appealed - Whether the refund of the pre-deposit paid through DRC-03 is barred by limitation under Section 54 - HELD - Section 54 of the CGST Act is applicable only for claiming refund of tax paid under the CGST Act or the IGST Act. The amount paid through DRC-03 was a pre-deposit payable for preferring an appeal against a service tax demand and not tax under the GST law. The payment having been made under mistake of law, the statutory time limit under Section 54 does not apply, the claim is outside the purview of the CGST Act, and the general provisions of the Limitation Act apply. This follows the High Court rulings holding that Section 54 is not applicable to amounts collected without authority of law, and that refund of duty or service tax paid under mistake cannot be barred by the special statutory limitation - The refund claim is not barred by limitation. The Revenue appeal is dismissed - Applicability of the doctrine of unjust enrichment to refund of pre-deposit made for preferring an appeal - Respondent had paid the pre-deposit from its own funds without passing on the burden to any customer - Whether the principle of unjust enrichment applies to refund of such pre-deposit - HELD - Following the Bombay High Court, a deposit made as a pre-deposit for availing the right of appeal is not a payment of duty, such amount is bound to be refunded when the appeal is allowed with consequential relief, and the doctrine of unjust enrichment is inapplicable - The order of the FAA allowing the refund of the pre-deposit paid through Form DRC-03 is upheld and the appeal of the Revenue is rejected. [Read less]

GST - Demand under Section 73 of the CGST Act, 2017 for ITC availed and utilised under CGST and SGST instead of IGST - Appellant inadvertently availed credit under the CGST and SGST heads instead of IGST in the first year of the GST regime, when the auto-populated statement became available only later - Adjudicating Authority confirmed the demand holding that credit of one tax head cannot be adjusted against another, which was upheld by the FAA with interest and penalty - Appellant contended that there was no loss of revenue and that justice should not be denied for a technical error, relying on the High Court decisions - ... [Read more]

GST - Demand under Section 73 of the CGST Act, 2017 for ITC availed and utilised under CGST and SGST instead of IGST - Appellant inadvertently availed credit under the CGST and SGST heads instead of IGST in the first year of the GST regime, when the auto-populated statement became available only later - Adjudicating Authority confirmed the demand holding that credit of one tax head cannot be adjusted against another, which was upheld by the FAA with interest and penalty - Appellant contended that there was no loss of revenue and that justice should not be denied for a technical error, relying on the High Court decisions - Whether the ITC inadvertently availed under CGST and SGST instead of IGST is to be reversed along with interest and penalty - HELD - The Kerala High Court in Kelleppuram Metals held that the electronic credit ledger is a pool of funds with compartments for IGST, CGST and SGST, to be taken as a unified source, so that no wrongful availing or utilisation arises and no loss of revenue results from utilising CGST and SGST instead of IGST, and that Section 73 is attracted only where tax is not paid or short paid, erroneously refunded or input tax is wrongly availed or utilised. A mistake which is inadvertent and technical does not justify proceedings under Section 73. These judgments squarely apply to the present case - The order of the FAA is set aside and the matter is remanded to the FAA to reconsider the appeal afresh in the light of those judgments after affording a reasonable opportunity of hearing to the Appellant – The appeal is disposed of - Reversal of a small portion of ITC held to be availed in breach of Section 16(4) of the CGST Act, 2017 - FAA directed the Appellant to reverse ITC pertaining to invoices uploaded by the supplier after the prescribed date - Whether the Appellant is liable to reverse such ITC - HELD - The dispute stands put to rest after the insertion of the non-obstante clause in sub-section (5) of Section 16 of the CGST Act - The Appellant is absolved of the liability of reversing the said amount of ITC under CGST and SGST in terms of Section 16(5). [Read less]

GST - Transitional credit under Section 140(3) of the CGST Act, 2017 - Entry of credit in Table 5(a) instead of Table 7(a) of Form GST TRAN-1 - Respondent availed transitional credit on stock held on the appointed day under Table 5(a), which is meant for credit carried forward under Section 140(1) - Adjudicating Authority confirmed the demand under Section 73 on the sole ground of entry under the wrong head, also holding that earlier judgments were inapplicable after the Board Circular permitting revised TRAN-1 - FAA allowed the appeal and Revenue challenged the same - Whether transitional credit can be denied merely becau... [Read more]

GST - Transitional credit under Section 140(3) of the CGST Act, 2017 - Entry of credit in Table 5(a) instead of Table 7(a) of Form GST TRAN-1 - Respondent availed transitional credit on stock held on the appointed day under Table 5(a), which is meant for credit carried forward under Section 140(1) - Adjudicating Authority confirmed the demand under Section 73 on the sole ground of entry under the wrong head, also holding that earlier judgments were inapplicable after the Board Circular permitting revised TRAN-1 - FAA allowed the appeal and Revenue challenged the same - Whether transitional credit can be denied merely because it was entered in the wrong table of TRAN-1 - HELD - Registered persons claiming credit under Section 140(1) enter details in Table 5(a), while those claiming under Section 140(3) enter them in Table 7(a). Several High Courts have viewed filing a credit claim in a wrong head or table as an inadvertent error or a procedural lapse which should not impede the right to claim transitional credit if the person is otherwise eligible - The reasoning of the Adjudicating Authority that earlier judgments stood displaced by the Circular is surprising, as these judgments not only permit filing of a corrected TRAN-1 but also reiterate the cardinal principle that procedural lapses cannot impair substantive rights. The notice and the order-in-original were silent on any inability of the Respondent to fulfil the conditions of Section 140(3) and were based solely on entry in the wrong column - The credit cannot be denied on the ground of entry in the wrong table - The impugned order is upheld and the Revenue appeal is dismissed - Ground of ineligibility under Section 140(3) not taken in the SCN and raised first in appeal - Raising a ground of non-fulfilment of conditions under Section 140(3) for the first time before the Tribunal when the SCN and the order-in-original were based only on entry in the wrong table - Revenue contended that the Respondent had not produced documentary evidence of eligibility except hard copies of invoices - Whether the Revenue can raise such a ground at the appellate stage - HELD - The Respondent had offered to produce the prescribed documents and registers, but the Adjudicating Authority did not scrutinise them or call for additional records, and never undertook an enquiry under Rule 121 despite being empowered. The ground of eligibility under Section 140(3) having been omitted in the order-in-original, it is deemed to have been constructively held not to be a ground for disallowing the credit. The Revenue cannot take such an inconsistent stand in appeal, which amounts to approbating and reprobating on the same issue - The contention of the Revenue is not sustainable and rejected - Duty of the FAA to make further enquiry under Section 107(11) - Whether the FAA was obliged to verify the entitlement of the Respondent to transitional credit under Section 140(3) and whether failure to do so renders the order invalid - HELD - The expression "as may be necessary" in Section 107(11) shows that the appellate authority is not required to undertake an enquiry in every appeal as a matter of routine, the sub-section conferring a discretionary power to be exercised when the facts of the case demand. No infirmity is found in the reasoning of the FAA - The contention of the Revenue has no merit, the impugned order-in-appeal is upheld and the appeal of the Revenue is rejected. [Read less]

GST - Transition of TDS credit through Form GST TRAN-1 - Demand on grounds beyond the SCN - Section 73 and Section 75(7) of CGST Act, 2017 - Respondent, a works contractor, claimed in Form GST TRAN-1 transitional credit consisting of a small purchase-credit component and a large component of tax deducted at source from its works-contract receipts under the UPVAT Act. SCN under Section 73 alleged a mismatch between the TRAN-1 claim and the credit shown in the VAT return, and non-furnishing of particulars of Forms C - Whether a ruling on the eligibility of VAT TDS for transition can be given in the absence of a properly fram... [Read more]

GST - Transition of TDS credit through Form GST TRAN-1 - Demand on grounds beyond the SCN - Section 73 and Section 75(7) of CGST Act, 2017 - Respondent, a works contractor, claimed in Form GST TRAN-1 transitional credit consisting of a small purchase-credit component and a large component of tax deducted at source from its works-contract receipts under the UPVAT Act. SCN under Section 73 alleged a mismatch between the TRAN-1 claim and the credit shown in the VAT return, and non-furnishing of particulars of Forms C - Whether a ruling on the eligibility of VAT TDS for transition can be given in the absence of a properly framed allegation and component-wise determination - HELD - The SCN is the foundation of the Revenue's case. The SCN identified only the return mismatch and the Form C objection. It did not separately identify an amount as TDS or allege that such an amount was incapable of transition because it arose from deductions from outward receipts. The Form C ground was dropped in the adjudication order. The rejection on the ground that TDS is not input tax was a distinct charge introduced for the first time in the order. Mere reference to Section 140 and Rule 117 does not meet the requirement of natural justice in the absence of a specific allegation - Section 75(7) confines confirmation of demand to the grounds specified in the notice, and the adjudicating order cannot repair a missing substantive charge. The order also did not reconcile the TDS component with the purchase-credit component, which is contrary to Section 75(6) requiring the order to state the relevant facts and its basis. The Revenue produced no completed VAT assessment or refund-disposal order to show that the legacy balance was rejected or exhausted, and such an order cannot be presumed. Remand merely to construct a fresh charge beyond the SCN would not cure the defects. As the appeal is decided on the validity of the notice and the proof of the demand, the question whether TDS can in principle be included in TRAN-1 is left open - The demand cannot be restored and the Revenue appeal is dismissed - Interest and penalty - Section 50 and Section 73(9) of CGST Act, 2017 - Interest and penalty were confirmed along with the tax demand on the transitional credit. The Respondent contended that the credit had been used before the notice and that there was no fraud, wilful misstatement or suppression - Whether the interest and penalty confirmed can be sustained - HELD - Interest must have a statutory basis and a verifiable computation. Interest on credit wrongly availed and utilised under Section 50(3) is computed under Rule 88B, while interest on unpaid output tax under Section 50(1) requires identification of the liability and the period of default. These distinct bases cannot be interchanged without reasons. The material did not supply the dates, rate, ledger-based utilisation and period supporting the interest, and the statement of the Respondent that credit was used before the notice is no substitute for that working - Section 75(9) does not dispense with proof of the facts required to establish and compute interest. Absence of fraud alone does not exclude liability or penalty arising under Section 73, but the penalty rests on the tax determination, which has not been sustained. The statutory conditions for a penalty provision must first exist before it can be imposed - The determination of interest and the penalty are unsustainable and cannot be restored. [Read less]

GST - Demand confirmed on grounds not stated in the SCN - Section 75(4) and Section 75(7) of CGST Act, 2017 - SCN under Section 73(1) alleged that the Appellant had not issued any credit notes against the sales returns claimed, resulting in escapement of turnover and short payment of tax. The Appellant furnished sample credit notes and offered to produce the complete set on requisition. The order in original did not call for the remaining credit notes, held that the credit notes were issued on the same day as the sales invoices and examined their values against the invoices, and confirmed the demand with interest and penal... [Read more]

GST - Demand confirmed on grounds not stated in the SCN - Section 75(4) and Section 75(7) of CGST Act, 2017 - SCN under Section 73(1) alleged that the Appellant had not issued any credit notes against the sales returns claimed, resulting in escapement of turnover and short payment of tax. The Appellant furnished sample credit notes and offered to produce the complete set on requisition. The order in original did not call for the remaining credit notes, held that the credit notes were issued on the same day as the sales invoices and examined their values against the invoices, and confirmed the demand with interest and penalty. No personal hearing was recorded - Whether the order in original confirming the demand on grounds not contained in the SCN and without personal hearing is sustainable - HELD - The foundational premise of the SCN that no credit notes were issued was contradicted by the order in original itself, which dealt with credit notes issued on the same day as the sales invoices. The order then tested the credit notes against Section 34, which was not invoked in the SCN, and examined their dates and values, which were never put to the Appellant. The Revenue itself appeared unsure of the basis of the SCN. Section 75(7) provides that no demand shall be confirmed on grounds other than the grounds specified in the notice. Section 75(4) requires an opportunity of hearing where an adverse decision is contemplated, and a personal hearing also allows the adjudicating authority to clarify its doubts. Where the Appellant offered to produce all credit notes and the officer never called for them, the Revenue cannot contend that the Appellant filed samples and withheld the rest. The plea of absence of prejudice cannot be accepted when the fresh grounds became known only after the order was issued - The order in original violates the principles of natural justice and Section 75(4) and Section 75(7) and is null and void - Findings of FAA on grounds beyond the SCN - Section 107(11) and Section 75(7) of CGST Act, 2017 - FAA dismissed the appeal on the grounds of non-disclosure of credit notes within the time limit under Section 34, non-reflection in annual returns, simultaneous generation of credit notes and invoices, and improbability of exchanges within a few days. None of these grounds was raised in the SCN. The Revenue contended that FAA could make further inquiry under Section 107(11), that the core finding of unproved sales returns was common to all orders, and that the Appellant had full opportunity before the Tribunal - Whether the order of FAA based on grounds beyond the SCN can be sustained - HELD - The order in appeal is founded on theories of the economics of the jewellery trade and the behaviour of consumers, and these cannot supplant evidence and legal principles. Further inquiry under Section 107(11) must also be conducted within the framework of natural justice. The appellate authority cannot enter a finding without first putting it to the Appellant, recording the contentions and passing a speaking order. There was no evidence that such an inquiry was conducted. A finding in the order in original on a ground not contained in the SCN does not attain any sanctity, and it was the duty of the appellate authority to rectify such errors, which it instead compounded by adding further grounds. The remarks on reporting time limits are not harmless, as they were used to discredit the credit notes. The plea that the Appellant has full opportunity before the Tribunal cannot compensate for the lack of opportunity before the lower authorities, since the Appellant has a vested right to a full opportunity at every stage. As the orders are quashed on these grounds, examination of the merits is unnecessary - The order in appeal is set aside and the appeal is allowed. [Read less]

GST - Appeal by Revenue under Section 112(3) of CGST Act, 2017 – Respondent-assessee filed an appeal before the FAA against the order passed under Section 74(3) of the CGST Act, 2017 - FAA dismissed the appeal on the ground of limitation without examining the merits, as it was filed beyond the period of three months under Section 107(1) and no application for condonation of delay was filed - The Appellant/Revenue reviewed the appeal under Section 112(3) and contended that the FAA order is liable to be set aside as the Respondent failed to comply with the mandatory condition of pre-deposit under Section 107(6) at the time... [Read more]

GST - Appeal by Revenue under Section 112(3) of CGST Act, 2017 – Respondent-assessee filed an appeal before the FAA against the order passed under Section 74(3) of the CGST Act, 2017 - FAA dismissed the appeal on the ground of limitation without examining the merits, as it was filed beyond the period of three months under Section 107(1) and no application for condonation of delay was filed - The Appellant/Revenue reviewed the appeal under Section 112(3) and contended that the FAA order is liable to be set aside as the Respondent failed to comply with the mandatory condition of pre-deposit under Section 107(6) at the time of filing the first appeal - Whether the order of the FAA is liable to be set aside on the ground of non-compliance with the pre-deposit under Section 107(6) - HELD - The FAA order, at para 5, clearly records that the Respondent submitted a challan as proof of payment of the pre-deposit. The appeal having been dismissed by the FAA on the ground of limitation, the original adjudication order remains operative and enforceable. The appeal preferred by the Revenue under Section 112(3) read with Section 112(4), challenging the FAA order, is uncalled for - The impugned order does not suffer from any infirmity warranting interference by the Tribunal - The appeal filed by the Revenue is dismissed [Read less]

GST - Refund of excess payment of tax - Relevant date under clause (h) of the Explanation to Section 54 of the CGST Act, 2017 - Respondent filed a single refund application in May 2020 for excess payment of tax shown as the tax period March 2018, which in substance covered the entire financial year 2017-18 from July 2017 to March 2018. The appellate authority allowed the claim by holding that the relaxation notifications covered the filing date - Whether the relevant date for a single composite refund claim for the year is to be taken from the annual reconciliation of March 2018 or whether limitation must be examined separ... [Read more]

GST - Refund of excess payment of tax - Relevant date under clause (h) of the Explanation to Section 54 of the CGST Act, 2017 - Respondent filed a single refund application in May 2020 for excess payment of tax shown as the tax period March 2018, which in substance covered the entire financial year 2017-18 from July 2017 to March 2018. The appellate authority allowed the claim by holding that the relaxation notifications covered the filing date - Whether the relevant date for a single composite refund claim for the year is to be taken from the annual reconciliation of March 2018 or whether limitation must be examined separately for the excess paid with each monthly return - HELD - The Circular No. 26/26/2017-GST and Circular No. 7/7/2017-GST and the Press Release do not alter the Explanation to Section 54, the two-year period or the relevant date. The Circular on carry forward deals with adjustment and not with refund or limitation, and the later Circular permits refund only where adjustment in subsequent returns is not feasible. The Respondent did not identify any return in which the earlier differential was reported on a net basis. Section 59 casts a duty of self-assessment on the registered person, and the annual return only summarises the position for the year. Later amendments to Rule 61(5) and the discontinuance of the reconciliation return concern the mechanism of filing and do not postpone the relevant date. The label in the application cannot fix limitation for a claim covering nine separate payments, and the monthly return is the return as held by the Hon'ble Supreme Court - The claim is not a single composite claim, the relevant date for excess paid with each monthly return is the date of filing of that return, and limitation is to be examined month-wise – Ordered accordingly - Limitation for months July 2017 to February 2018 and effect of Notification No. 35/2020 as amended by Notification No. 55/2020 - Whether claims for earlier months are barred under Section 54(1) and saved by the COVID relaxation Notification No. 35/2020-Central Tax as amended by Notification No. 55/2020-Central Tax - The last dates for the months July 2017 to February 2018 fell between August 2019 and March 2020, before the relaxation window opened on 20.03.2020, whereas the refund application was filed on 06.05.2020. The appellate authority held that the notifications squarely covered the claim as it was filed within the relaxation period - Whether the claims for these months are barred by limitation - HELD - The notification extends a time limit which falls during the period from 20.03.2020 to the specified end date, and what determines its application is the date on which the limit falls and not the date on which the application is filed - A limit which had already expired before 20.03.2020 is not one which falls during the window, and nothing in the notification revives a period that had lapsed before its commencement. The Hon'ble High Court of Karnataka in Merck Life case has also held the two-year period to be mandatory for the tax authority. The claims for July 2017 to February 2018 are therefore barred under Section 54(1) so far as these notifications are concerned - For March 2018 the last date fell within the window and the application was in time, as accepted in the order-in-original, but the Respondent's own figures disclose no excess payment for that month - The notifications afford no refund to the Respondent, and the reasoning of the appellate authority based on the date of filing was not sustainable - Refund for February 2018 under Notification No. 13/2022 and the judgment of the Hon'ble Supreme Court on extension of limitation - Benefit of Notification No. 13/2022-Central Tax dated 05.07.2022 and the judgment of the Hon'ble Supreme Court in the suo motu proceedings on extension of limitation - Limitation for the excess paid with the return for February 2018 expired in March 2020 within the exclusion window, and the application was filed during the window itself - Whether the Respondent is entitled to refund for February 2018 although the claim was not specifically pressed - HELD - Where limitation expired within the period excluded from 15.03.2020 to 28.02.2022, all persons have limitation of ninety days from 01.03.2022, and the application filed earlier is in time on any computation. For July 2017 to January 2018 the limit had expired before the exclusion window commenced, and these claims are not saved by the notification or the judgment. There can be no estoppel against a statute, a concession on a question of law binds neither the party nor the Tribunal, and limitation is a pure question of law on admitted facts which may be considered at any stage. The claim filed already included the excess for February 2018, no prejudice was caused to the Appellant, and denying a refund lawfully due merely because the claim was not framed month-wise would defeat the intent of the Hon'ble Supreme Court and the notification - The Respondent is entitled to refund for February 2018, to be quantified after segregating it from the consolidated claim and granted in accordance with law, while claims for July 2017 to January 2018 remain barred - Plea of amount paid without authority of law under Article 265 of the Constitution - Refund - Alternative plea that excess payment is an amount paid without authority of law within Article 265 of the Constitution, so that the limitation under Section 54(1) does not apply - Whether the excess amount is an amount paid without authority of law so that the limitation under Section 54(1) does not bar its refund - HELD - In the decisions relied upon, the amount was either exempt, unconstitutionally levied, deposited outside the return under a mistaken belief, or paid twice as found by the authority itself. Here GST was chargeable on the services, the amounts were paid as tax through the monthly return, and no authority had found or conceded that any identified amount was paid twice or without authority of law. The record shows only a difference between tax declared in the two returns attributed to corrections and annual reconciliation, and the Respondent did not plead when and how any mistake of law was discovered - The Respondent, having elected to apply under Section 54 through Form GST RFD-01, must take the statutory period that goes with it, and the burden of bringing itself within an exception to limitation was not discharged. The principle laid down by the Hon'ble Supreme Court that a refund application beyond the statutory period is untenable was applied - The alternative plea under Article 265 is not made out on the record, and the claim remains barred under Section 54(1) - Whether there was any excess payment of tax for March 2018 - Existence of excess payment for March 2018 and consistency of the Department's ground with the order-in-original - Respondent contended that the order-in-original itself recorded excess payment for March 2018 and that the Appellant-Department could not approbate and reprobate, and further that excess of earlier months was carried forward into March 2018 - The Appellant-Department contended that on the month-wise break-up of the Respondent there was a short payment for that month and the sanctionable refund was nil - Whether there was any excess payment of tax for March 2018 and whether the ground raised is contrary to the order-in-original - HELD - The order-in-original recorded the figure with a negative sign and concluded in the next sentence that the eligible refund was nil, and a negative figure of excess payment is a shortfall and not an excess. The Respondent's own statement likewise showed a negative figure for that month, and the figures differ but the sign and conclusion are the same, so the ground is consistent with the order-in-original and there is no approbation and reprobation. The plea of carry forward depends on the premise rejected earlier, as the relevant date of each [Read less]

GST - Gujarat AAR - Classification of Biodegradable and Compostable Bags - Heading 3926 of Customs Tariff Act, 1975 - Applicant manufactured biodegradable and compostable packing bags from bio-based/biodegradable polymer resins such as PBAT, starch and calcium carbonate. Applicant claimed classification under sub-heading 39079990 - Whether the biodegradable and compostable packing bags are classifiable under HSN 39079990 - HELD - Polybutylene Terephthalate and polylactic acid find mention under Tariff Heading 3907 whereas starch-based polymers and compostable bioplastics do not find mention in any heading of Chapter 39. Si... [Read more]

GST - Gujarat AAR - Classification of Biodegradable and Compostable Bags - Heading 3926 of Customs Tariff Act, 1975 - Applicant manufactured biodegradable and compostable packing bags from bio-based/biodegradable polymer resins such as PBAT, starch and calcium carbonate. Applicant claimed classification under sub-heading 39079990 - Whether the biodegradable and compostable packing bags are classifiable under HSN 39079990 - HELD - Polybutylene Terephthalate and polylactic acid find mention under Tariff Heading 3907 whereas starch-based polymers and compostable bioplastics do not find mention in any heading of Chapter 39. Since the product is biodegradable and compostable bags, it cannot be covered under Tariff Heading 3907. Headings 3901 to 3914 cover plastic raw materials in primary form, and the bags do not find mention in headings 3915 to 3925. Heading 3926 covers other articles of plastics, and there is no mention of Biodegradable and Compostable Bags in any of its sub-headings. The product is therefore aptly classifiable under sub-heading 39269099 and not under sub-heading 39079990 as opined by the Applicant - The bags are held classifiable under HSN 39269099 of the First Schedule to the Customs Tariff Act, 1975 - Ordered accordingly - Rate of GST on Biodegradable Bags - Entry No. 319 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) - Bags classifiable under sub-heading 39269099 could fall under Entry No. 127 of Schedule-II, which covers heading 3926, or under Entry No. 319 of Schedule-I, which covers paper sacks/bags and bio-degradable bags of Chapters 39 and 48. The Applicant submitted consent orders of the Pollution Control Board, a certificate of an international certification body and a test report on the compostable film in support of the claim that the bags are biodegradable and compostable - Whether the bags attract GST under Entry No. 319 of Schedule-I or under Entry No. 127 of Schedule-II - HELD - Entry No. 319 was newly inserted in Schedule-I and was not part of the earlier Notification No. 01/2017-Central Tax (Rate). The minutes of the 54th meeting of the GST Council show that States urged a reduced rate to promote paper bags and biodegradable bags made from starch as eco-friendly alternatives to plastic bags. The entry therefore takes into consideration the taxability of both paper sacks/bags and biodegradable bags. The inclusion of Chapter 39 in the entry is to encourage production of plastic bags which are biodegradable in nature, eco-friendly and environmental friendly. The test report on the sample shows disintegration, seed germination and biomass levels in line with the composting standard. Since the applicable entry is decided, there is no need to discuss Entry No. 127 of Schedule-II - The bags are covered under Entry No. 319 of Schedule-I and are liable to GST at 5%, strictly subject to the validity of the Applicant's claim that the product is biodegradable. [Read less]

GST - Refund of unutilised Input Tax Credit lying in Electronic Credit Ledger - Section 54 of CGST Act, 2017 - Respondent, an SEZ unit, filed refund application under the category of "any other" for unutilised ITC lying in its Electronic Credit Ledger. SCN issued and the refund claim was rejected under Rule 92(3) of CGST Rules, 2017. FAA allowed the appeals filed by the Respondent - The Revenue filed appeals before the Tribunal. Respondent took an additional stand that the refund claimed is of excess tax paid by it and not of unutilised ITC under Section 54(3) - Whether the refund claim falls under the category of refund o... [Read more]

GST - Refund of unutilised Input Tax Credit lying in Electronic Credit Ledger - Section 54 of CGST Act, 2017 - Respondent, an SEZ unit, filed refund application under the category of "any other" for unutilised ITC lying in its Electronic Credit Ledger. SCN issued and the refund claim was rejected under Rule 92(3) of CGST Rules, 2017. FAA allowed the appeals filed by the Respondent - The Revenue filed appeals before the Tribunal. Respondent took an additional stand that the refund claimed is of excess tax paid by it and not of unutilised ITC under Section 54(3) - Whether the refund claim falls under the category of refund of unutilised ITC lying in the Electronic Credit Ledger or refund of excess tax paid by the supplier - HELD - The SCN itself records that the refund application was filed under the category of "any other" for ITC remaining unutilised in the Electronic Credit Ledger. The order of the FAA records that the claim relates to unutilised ITC in respect of credit distributed by the Input Service Distributor and in some cases tax paid on inward supplies by suppliers. This was never questioned or controverted by the Respondent at any stage - The additional stand that the refund is of excess tax paid is not backed by any documentary evidence or law. The supplier paid the tax voluntarily for a long time and it cannot be assumed that the tax was paid by mistake or under duress or coercion. Both the Revenue and the Respondent are on the same page that the refund claims pertain to unutilised ITC availed on the basis of credit distributed by the Input Service Distributor - The claim is held to be a refund of unutilised ITC distributed by the Input Service Distributor and the additional plea of refund of excess tax paid is not accepted - Refund of ITC distributed by Input Service Distributor to SEZ unit - Section 54 of CGST Act, 2017 read with Rule 89 of CGST Rules, 2017 – Respondent-SEZ claimed refund of unutilised ITC lying in its Electronic Credit Ledger, being credit distributed by the Input Service Distributor - Revenue contended that under the proviso to Rule 89(1) the application for refund in respect of supplies to an SEZ unit is to be filed by the supplier. It was further contended that the SEZ unit is not liable to pay tax on such supplies, and that credit distributed by the ISD cannot be equated with tax paid on supplies made to the SEZ unit - Whether the refund of unutilised ITC distributed by the Input Service Distributor can be claimed by an SEZ unit as the recipient of the services - HELD - The Input Service Distributor, as defined in Section 2(61) of the CGST Act, is an office of the supplier which receives tax invoices towards input services and issues a prescribed document for distributing the credit. In such a case it is not possible for the supplier of goods and services to file a refund application for the input tax credit distributed by the Input Service Distributor. As there is no specific supplier who can claim the refund, the stand of the Revenue that the SEZ unit is not entitled to seek refund of the ITC paid in connection with goods or services supplied to it is not tenable - The proviso to Rule 89 does not use the word "only", and no word can be inserted into a Rule by interpretation. The restriction read into the proviso by the Revenue is therefore misplaced. An SEZ unit cannot be denied refund of ITC solely on the ground that it is not the supplier. No decision contrary to this position was cited by the Revenue - The contention of the Revenue is rejected and the SEZ unit is held entitled to claim refund of the unutilised ITC distributed by the Input Service Distributor - Relevance of Board circulars on manual filing of refund claims - Circular No. 17/17/2017-GST and Circular No. 24/24/2017-GST - Revenue submitted that the refund claim could not be processed under any of the categories of refund specified in the circulars prescribing manual filing and processing of refund claims, and therefore the claim was rightly rejected - Whether the Board circulars restrict the right of the SEZ unit to claim refund - HELD - The Circulars were issued due to non-availability of the refund module on the common portal and prescribe the procedure for manual filing and processing of refund claims. They did not bring any substantial change in the law relating to the right of refund to SEZ units and do not in any manner circumscribe the right of the SEZ unit to claim refund - The reliance of the Revenue on the Circulars is rejected, no fault is found with the orders of the FAA, the orders are affirmed – The appeals filed by the Revenue are dismissed [Read less]

GST - Validity of cancellation of registration under Rule 21(e) where SCN rests on oral intimation and does not disclose supplier details or grounds - Appellant's registration was cancelled on the allegation of wrongful availment of ITC in contravention of Section 16 of the CGST Act, 2017, on the basis of invoices issued by supplier firms whose registrations had been cancelled, and the FAA confirmed the cancellation - The SCN alleged that the Appellant was violating Section 16(2) by claiming ITC - Whether the cancellation is sustainable when the SCN does not specify the suppliers, the GSTIN, the period or the particulars o... [Read more]

GST - Validity of cancellation of registration under Rule 21(e) where SCN rests on oral intimation and does not disclose supplier details or grounds - Appellant's registration was cancelled on the allegation of wrongful availment of ITC in contravention of Section 16 of the CGST Act, 2017, on the basis of invoices issued by supplier firms whose registrations had been cancelled, and the FAA confirmed the cancellation - The SCN alleged that the Appellant was violating Section 16(2) by claiming ITC - Whether the cancellation is sustainable when the SCN does not specify the suppliers, the GSTIN, the period or the particulars of inadmissible ITC, and does not refer to Section 29 - HELD - The SCN issued by the adjudicating authority must contain all details necessary under law. An SCN which does not specify the grounds or sufficient factual particulars violates natural justice. The requirements necessary to sustain the validity of a notice or order must be contained therein, and any deficiency in the SCN cannot subsequently be cured - The SCN did not disclose who the supplier was, what the GSTIN was or in which period inadmissible ITC was claimed. The recommendation for cancellation was based merely on an oral intimation, and no other formal communication was made to the Proper Officer for initiating cancellation proceedings. A mere reference to an oral intimation allegedly given by an officer cannot by itself constitute a valid and sufficient ground for cancellation in the absence of specific allegations supported by the relevant statutory provisions - Proceedings under Rule 21(e) and proceedings under Section 74A are distinct and materially different in nature, scope and legal consequences, and the cancellation had to be examined strictly within its own scope, without any finding on the Section 74A proceedings. Section 29 read with Rule 22 provides the framework for cancellation, but neither the SCN nor the cancellation order referred to it, and its invocation by the FAA cannot cure the fundamental defects as the taxpayer must be afforded a fair and effective opportunity to meet the allegations - The cancellation order and the Order-in-Appeal suffer from legal infirmities the cancellation is revoked and the registration stands restored - The appeal is allowed - Powers of FAA to rely on material not mentioned in the SCN while confirming cancellation of registration - The FAA confirmed the cancellation of registration on the basis of an enquiry report and details of the Form DRC-01A, which were not mentioned in the SCN issued for cancellation, after seeking clarification from the Proper Registering Authority - Whether the FAA can confirm the cancellation on the basis of evidence not produced at the time of passing the cancellation order and without giving the Appellant an opportunity of rebuttal - HELD - The FAA went beyond the SCN and acted as if collecting evidence at the appellate stage. Additional evidence can be produced only in rare circumstances, and where the authority wants additional evidence, a proper opportunity of rebuttal must be given to the Appellant. The order of the FAA did not mention any effective and reasonable opportunity of rebuttal and hearing. Under Rule 112, additional evidence is admissible only in the circumstances specified therein. The Appellate Authority must record specific reasons for admitting or rejecting such evidence, and a personal hearing must be provided in case of rejection. Before admitting such evidence, reasonable opportunity must be given to the adjudicating authority to examine and rebut it. Appellate proceedings should not, as a matter of ordinary practice, be converted into a fresh investigation merely to remedy deficiencies in the original adjudication - The Order-in-Appeal confirming the cancellation on the basis of an enquiry report not mentioned in the SCN is not sustainable in law. The appeal is allowed [Read less]

GST - Validity of cancellation of registration where Show Cause Notice rests on oral intimation and does not disclose supplier details or grounds - Appellant's registration was cancelled on the allegation of wrongful availment of Input Tax Credit (ITC) in violation of Section 16(2) of the CGST Act, 2017 and the First Appellate Authority (FAA) confirmed the cancellation by invoking Section 29 of the Act - SCN alleged that the Appellant was claiming ITC in violation of Section 16(2), referred to an intimation notice under Section 74A and to an oral communication by an officer, and directed the Appellant to explain why regis... [Read more]

GST - Validity of cancellation of registration where Show Cause Notice rests on oral intimation and does not disclose supplier details or grounds - Appellant's registration was cancelled on the allegation of wrongful availment of Input Tax Credit (ITC) in violation of Section 16(2) of the CGST Act, 2017 and the First Appellate Authority (FAA) confirmed the cancellation by invoking Section 29 of the Act - SCN alleged that the Appellant was claiming ITC in violation of Section 16(2), referred to an intimation notice under Section 74A and to an oral communication by an officer, and directed the Appellant to explain why registration should not be cancelled - Whether the cancellation of registration is sustainable when the SCN does not specify the suppliers, the GSTIN, the period or the particulars of inadmissible ITC, and does not refer to Section 29 - HELD - The SCN issued by the adjudicating authority must contain all details necessary under law, and an SCN which does not specify the grounds or sufficient factual particulars violates natural justice - The requirements necessary to sustain the validity of a notice or order must be contained therein, and any deficiency in the SCN cannot subsequently be cured. The SCN did not disclose who the supplier was, what the GSTIN was or in which period inadmissible ITC was claimed. The recommendation for cancellation was based merely on an oral intimation, and no other formal communication was made to the Proper Officer for initiating cancellation proceedings - A mere reference to an oral intimation allegedly given by an officer cannot by itself constitute a valid and sufficient ground for cancellation in the absence of specific allegations supported by the relevant statutory provisions. Proceedings for cancellation of registration and proceedings under Section 74A are distinct and materially different in nature, scope and legal consequences, and the cancellation had to be examined strictly within its own scope, without any finding on the Section 74A proceedings - Section 29 read with Rule 22 provides the framework for cancellation, but neither the SCN nor the cancellation order referred to it, and its invocation by the FAA cannot cure the fundamental defects as the taxpayer must be afforded a fair and effective opportunity to meet the allegations - The cancellation order and the Order-in-Appeal suffer from legal infirmities. The cancellation is revoked and the registration stands restored - The appeal is allowed - GST - Powers of FAA to rely on material not mentioned in the SCN while confirming cancellation of registration - The FAA confirmed the cancellation of registration on the basis of an enquiry report and details of the Form DRC-01A, which were not mentioned in the SCN issued for cancellation, after seeking clarification from the Proper Registering Authority - Whether the FAA can confirm the cancellation on the basis of evidence not produced at the time of passing the cancellation order and without giving the Appellant an opportunity of rebuttal - HELD - The FAA went beyond the SCN and acted as if collecting evidence at the appellate stage. Additional evidence can be produced only in rare circumstances, and where the authority wants additional evidence, a proper opportunity of rebuttal must be given to the Appellant. The order of the FAA did not mention any effective and reasonable opportunity of rebuttal and hearing. Under Rule 112, additional evidence is admissible only in the circumstances specified therein. The Appellate Authority must record specific reasons for admitting or rejecting such evidence, and a personal hearing must be provided in case of rejection. Before admitting such evidence, reasonable opportunity must be given to the adjudicating authority to examine and rebut it. Appellate proceedings should not, as a matter of ordinary practice, be converted into a fresh investigation merely to remedy deficiencies in the original adjudication - The Order-in-Appeal confirming the cancellation on the basis of an enquiry report not mentioned in the SCN is not sustainable in law. The appeal is allowed [Read less]

GST – Classification of Supply, erection, testing and commissioning of fire protection system - Composite supply under Section 2(30) of the CGST Act, 2017 - Applicant supplied fire protection systems comprising pumps, pipes, valves, fittings, hydrant components and compressors to private industries and Government institutions, along with installation, testing and commissioning. Under the sample work order, the Applicant was required to supply the items, clear the site, build RCC pedestals and platforms, and erect, test and commission the system - Whether the supply, erection, testing and commissioning of the fire protect... [Read more]

GST – Classification of Supply, erection, testing and commissioning of fire protection system - Composite supply under Section 2(30) of the CGST Act, 2017 - Applicant supplied fire protection systems comprising pumps, pipes, valves, fittings, hydrant components and compressors to private industries and Government institutions, along with installation, testing and commissioning. Under the sample work order, the Applicant was required to supply the items, clear the site, build RCC pedestals and platforms, and erect, test and commission the system - Whether the supply, erection, testing and commissioning of the fire protection system constitutes a composite supply under Section 2(30) - HELD - A composite supply means two or more taxable supplies of goods or services which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. In the contract for the fire protection system, the supply of goods and the erection, testing and commissioning services are naturally bundled and supplied in conjunction with each other. The supply is a composite supply - Ordered accordingly - Fire protection system - Movable or immovable property for levy of GST - Applicant contended that the system is not permanently attached to the earth, that it can be dismantled and assembled as per the needs of the recipient, and that installation involves no earth work - Whether the fire protection system is movable or immovable property for the purpose of levy of GST - HELD - The Applicant is required to get the designated spot ready by clearing bushes and trees, build the necessary RCC pedestals and platforms, do the electric wiring, install the pipes, valves and gauges, connect the whole system, and carry out testing and commissioning. The components installed at the building or premises are intended to provide a permanent fire-protection infrastructure for the facility. They are not meant to be removed and relocated without substantial dismantling. The completed system therefore assumes the character of immovable property for the purpose of levy of GST - The fire protection system is regarded as immovable property - Works contract under Section 2(119) of the CGST Act, 2017 - Classification under SAC 9954 and applicable rate - Applicant sought to know whether the contract is a works contract covered under SAC 9954 and chargeable at 12%. The Applicant also supplied the system to Government institutions - Whether the contract for supply, erection, testing and commissioning of the fire protection system is a works contract covered under SAC 9954 and chargeable at the rate of 12% - HELD - A works contract means a contract for erection, installation, fitting out or commissioning of any immovable property wherein transfer of property in goods is involved in the execution of such contract. The fire protection system involves transfer of property in goods and erection, testing and commissioning of an immovable property. The contract is therefore a composite supply of works contract, which is treated as a supply of services under para 6 of Schedule II - Heading 9954 covers construction services. The electrical installation work, including fire alarm installation, is covered under SAC 995461. The firefighting water piping, sprinkler and hydrant network installation is covered under SAC 995462 - As regards the rate, the entry for composite supply of works contract provided to Government involves predominantly earth work. The sample work order requires excavation and backfilling, which are part of earth work. However, the charges for the same are minuscule in relation to the total contract amount. The works contract services therefore do not get covered under that entry, and the rate of 6% sought by the Applicant is not applicable - The contract is a works contract covered under SAC 9954. It is not chargeable at 12% and is not covered under Serial No. 3(vii) of Notification No. 11/2017-Central Tax (Rate). [Read less]

GST – Karnataka AAR - Transfer of Business as Supply - Section 7(1)(a) of CGST Act, 2017 - Applicant, a Limited Liability Partnership, entered into Commercial Terms for Agreement to Sale for transfer of its restaurant business to the Buyer for a lump-sum consideration - Whether the transfer of business constitutes a supply within the meaning of Section 7 of the CGST Act, 2017 - HELD - Section 7(1)(a) requires that there is a supply of goods or services or both, made or agreed to be made for a consideration, by a person, in the course or furtherance of business. The Applicant, being a Limited Liability Partnership, falls ... [Read more]

GST – Karnataka AAR - Transfer of Business as Supply - Section 7(1)(a) of CGST Act, 2017 - Applicant, a Limited Liability Partnership, entered into Commercial Terms for Agreement to Sale for transfer of its restaurant business to the Buyer for a lump-sum consideration - Whether the transfer of business constitutes a supply within the meaning of Section 7 of the CGST Act, 2017 - HELD - Section 7(1)(a) requires that there is a supply of goods or services or both, made or agreed to be made for a consideration, by a person, in the course or furtherance of business. The Applicant, being a Limited Liability Partnership, falls within the definition of person under Section 2(84) of the CGST Act, 2017. The Buyer is required to pay a consideration as per the agreement, as defined under Section 2(31), and the transaction is therefore not gratuitous in nature. The Applicant carries on business within the meaning of the inclusive definition in Section 2(17), and the transaction arises in the course or furtherance of such business. All the essential ingredients of Section 7(1)(a) are satisfied - The transaction constitutes a supply within the meaning of Section 7(1)(a) of the CGST Act, 2017 – Ordered accordingly - Exemption for Transfer of Going Concern under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) - Under the agreement, the Buyer was to take over the restaurant operations along with the staff, faculty accommodation and recurring operational costs and the assets. A Handover Letter and Asset Transfer Acknowledgement Letter recorded the actual handover of operations and of the assets in working condition. Past liabilities of the business were not transferred, and a single lump-sum consideration was agreed without item-wise valuation of assets - Whether the transfer of business is a transfer of a going concern, as a whole or an independent part thereof, exempt under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) - HELD - The expression going concern is not defined under the CGST Act, 2017. Its determination requires examining the substance and overall effect of the transaction, namely whether the business activity is transferred as an operational and functional unit which the transferee can continue after the transfer. The handover of operations, staff, assets and responsibility for maintenance, repairs, operational expenses and insurance shows that what is transferred is not merely a collection of assets but the restaurant business as an identifiable and functioning economic activity. The absence of item-wise valuation, by itself, is not conclusive, but it supports the intention to transfer the undertaking as an operational whole. Transfer of all past liabilities is not an indispensable condition, and retention of certain past liabilities by the transferor cannot alter the character of the transfer of a functioning business undertaking - The transfer is covered under Entry No. 2 of Notification No. 12/2017-CT (Rate) and is exempt from GST – Ordered accordingly [Read less]