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GST – Demand for tax under Section 74 for alleged suppression of outward supplies – Revenue conducted search and inspection at registered office of taxpayer - Adjudicating authority issued demand order in Form GST-DRC-07 determining tax liability for suppression of outward supply without serving any statutory show cause notice on taxpayer – Whether proceedings for recovery of tax under Section 74 of CGST Act, 2017 can be sustained when no statutory show cause notice has been issued to taxpayer – HELD - Section 74(1) of CGST Act mandates that proper officer shall serve notice on the person chargeable with tax, which... [Read more]

GST – Demand for tax under Section 74 for alleged suppression of outward supplies – Revenue conducted search and inspection at registered office of taxpayer - Adjudicating authority issued demand order in Form GST-DRC-07 determining tax liability for suppression of outward supply without serving any statutory show cause notice on taxpayer – Whether proceedings for recovery of tax under Section 74 of CGST Act, 2017 can be sustained when no statutory show cause notice has been issued to taxpayer – HELD - Section 74(1) of CGST Act mandates that proper officer shall serve notice on the person chargeable with tax, which has not been paid or short paid or for wrongful availing of input tax credit by reason of fraud or wilful misstatement or suppression of facts - GST-DRC-01 and GST-DRC-02 forms cannot substitute statutory notice contemplated under Sections 73 and 74. A show cause notice is the starting point of legal proceeding and a mandatory requirement according to principles of natural justice. Even when SCN is issued, it should contain foundational facts to enable taxpayer to make effective representation. No other communication or order can be construed as statutory show cause notice - As per judgment of Supreme Court in M/S Tata Steel Limited case, foundational facts which led to inference of fraud, willful misrepresentation or suppression should be evident from the notice itself. In this case, no notice at all has been issued even though tax was determined under Section 74 - The demand created under Section 74 cannot survive without a statutory notice – The impugned order set aside and the appeal is allowed [Read less]

GST – Transportation of goods on longer route to avoid difficult terrain - Diversion of route, intention to evade tax under Section 129 of the CGST Act, 2017 - Vehicle was intercepted for deviating from shorter route of about 70 km to longer route covering about 200 km excess. Proper Officer issued notice alleging discrepancies and intrusion into geographical area of State without necessity and concluded that appellant intended to deliver goods to unintended recipient in State to evade tax - Whether adoption of longer route instead of shorter route for transportation of goods with valid documents, due to difficult terrai... [Read more]

GST – Transportation of goods on longer route to avoid difficult terrain - Diversion of route, intention to evade tax under Section 129 of the CGST Act, 2017 - Vehicle was intercepted for deviating from shorter route of about 70 km to longer route covering about 200 km excess. Proper Officer issued notice alleging discrepancies and intrusion into geographical area of State without necessity and concluded that appellant intended to deliver goods to unintended recipient in State to evade tax - Whether adoption of longer route instead of shorter route for transportation of goods with valid documents, due to difficult terrain and safety measures, without evidence of actual intent to evade tax or delivery to unintended recipients, constitutes mala fide intention to evade tax under Section 129 – HELD - The vehicle had been transported with valid documents as required under law which remains undisputed. The GST Act and Rules do not prescribe any specific route for transportation of goods. Unlike old VAT law, GST does not require assessee to declare or rigidly stick to designated route of transportation - The explanation submitted by appellant that longer route was opted to avoid difficult terrain and hilly region falling in shorter route appears plausible and reasonable. The respondent has not shown any place of destination in Uttar Pradesh where appellant intended to consign goods. Taking alternative or longer route for logistical reasons and safety measures does not constitute statutory basis for detention or attract mala fide intention - Nothing is brought on record to ascertain that appellant would have actually intended to evade tax. Transportation with valid documents and route diversion for genuine commercial and safety reasons does not constitute mala fide intention to evade tax – The impugned order is quashed and the appeal is allowed [Read less]

Service Tax - Taxability of reimbursement of proportionate common expenses - Scope of consideration under Section 67 Finance Act - Appellant clinic provided premises space to charitable eye hospital and recovered proportionate share of electricity charges, water charges, municipal taxes and maintenance charges, without charging any rent as per Memorandum - During audit objection was raised that reimbursements should be included in taxable value under Section 67 read with Rule 5 of Service Tax (Determination of Value) Rules, 2006 - Show Cause Notice was issued proposing demand for recovery of Service Tax with interest and p... [Read more]

Service Tax - Taxability of reimbursement of proportionate common expenses - Scope of consideration under Section 67 Finance Act - Appellant clinic provided premises space to charitable eye hospital and recovered proportionate share of electricity charges, water charges, municipal taxes and maintenance charges, without charging any rent as per Memorandum - During audit objection was raised that reimbursements should be included in taxable value under Section 67 read with Rule 5 of Service Tax (Determination of Value) Rules, 2006 - Show Cause Notice was issued proposing demand for recovery of Service Tax with interest and penalty on allegation that arrangement constituted renting of immovable property - Whether reimbursement of common expenses can be treated as consideration for taxable service - HELD - Rule 5(1) of Service Tax (Determination of Value) Rules went beyond the mandate of Section 67 (unamended) and was ultra vires. The Supreme Court in Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd., held that in valuation of taxable service, the value shall be the gross amount charged for such service and valuation cannot be anything more or less than the consideration paid as quid pro quo for rendering such service. Section 67, as it stood prior to 14.05.2015, did not include reimbursable expenditure or cost within the scope of consideration - The amendment made by Finance Act, 2015 with effect from 14.05.2015 including reimbursable expenditure in definition of consideration was a substantive change and therefore prospective in operation. Since disputed period was October 2010 to March 2015, for period prior to 14.05.2015, reimbursements cannot be added to value of consideration - The appellant acted on bona fide belief founded upon rational interpretation that reimbursement of proportionate common expenses did not constitute taxable consideration, and the Revenue had not made case of suppression with intent to evade Service Tax - The confirmed demand is set aside and the appeal is allowed [Read less]

Customs – Classification of Disposable Micro-cuvettes as Parts of Analytical Instrument – Appellant imported “STA Satellite Cuvettes”, sealed cartridge assemblies consisting of plastic body with small steel ball enclosed, designed exclusively for use with STAGO blood coagulation analysers - Appellant classified goods as spare parts under CTI 9027 9090. Customs Dept objected to this classification, contending that because the cuvettes are single-use disposable consumables, they must be classified as general plastic articles under CTI 3926 9099, which attract higher duty rates – Whether micro-cuvettes constitute id... [Read more]

Customs – Classification of Disposable Micro-cuvettes as Parts of Analytical Instrument – Appellant imported “STA Satellite Cuvettes”, sealed cartridge assemblies consisting of plastic body with small steel ball enclosed, designed exclusively for use with STAGO blood coagulation analysers - Appellant classified goods as spare parts under CTI 9027 9090. Customs Dept objected to this classification, contending that because the cuvettes are single-use disposable consumables, they must be classified as general plastic articles under CTI 3926 9099, which attract higher duty rates – Whether micro-cuvettes constitute identifiable parts or accessories of the STAGO coagulation analyser classifiable under Heading 9027 by virtue of Chapter 90 Note 2(b), or whether they are merely disposable consumable articles of plastic classifiable under residuary Heading 3926 – HELD – The micro-cuvettes are identifiable and functionally integrated parts and accessories suitable for use solely or principally with the STAGO coagulation analyser and are classifiable under CTI 9027 9090. The designation as single-use disposable does not by itself render an article a consumable or exclude it from being a part or accessory. A critical distinction exists between a disposable article (describing intended life or use-cycle) and a consumable article (describing one that is used up or loses identity in operation) - Where an article is specifically designed for, functionally integrated with, and necessary to the operation of a machine, it qualifies as a part or accessory irrespective of its single-use character. The micro-cuvettes participate actively in the coagulation analysis process; the plasma sample is contained within and the steel ball enclosed therein is subjected to magnetic control by the analyser to detect coagulation time. Chapter 90 Note 2(b) requires classification of parts and accessories, if suitable for use solely or principally with a particular machine, with that machine, without requiring permanent installation or incorporation - The article must be considered in its entirety as a specially designed cartridge with integrated steel ball intended for the particular analytical system. A specific tariff heading prevails over a general or residuary heading; material of construction by itself does not determine classification where the article has acquired a specific identity and function as a component of an analytical instrument - The micro-cuvettes are classifiable under CTI 9027 9090. Differential duty demand and interest are set aside. Penalty, confiscation and redemption fine do not arise - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Classification of Silver-based Electrical Contacts as Parts of Electrical Apparatus, Waiver of show cause notice and personal hearing at adjudication stage – Appellant imports Rivet Mobile Contact, sealed cartridge assemblies with silver composition of 99.116 per cent. Goods were self-assessed and declared under CTI 85389000. During examination, jewellery expert opined on silver content, leading to reclassification under CTI 71141120 as precious metal articles. Appellant sought expedited adjudication without show cause notice or personal hearing - In subsequent imports, appellant self-assessed under alternati... [Read more]

Customs – Classification of Silver-based Electrical Contacts as Parts of Electrical Apparatus, Waiver of show cause notice and personal hearing at adjudication stage – Appellant imports Rivet Mobile Contact, sealed cartridge assemblies with silver composition of 99.116 per cent. Goods were self-assessed and declared under CTI 85389000. During examination, jewellery expert opined on silver content, leading to reclassification under CTI 71141120 as precious metal articles. Appellant sought expedited adjudication without show cause notice or personal hearing - In subsequent imports, appellant self-assessed under alternative tariff codes then appealed seeking classification under CTH 8538 – Whether appeals against self-assessed bills of entry without departmental reassessment are maintainable, and whether goods should be classified as precious metal articles or as electrical contacts – HELD – Appeals are maintainable and waiver of procedural safeguards does not extinguish statutory right to appeal under Section 128 - A self-assessed bill of entry is an order of assessment appealable under the Act; absence of departmental reassessment does not render appeal non-maintainable - Waiver of SCN and personal hearing at adjudication stage operates at different stage from appeal and serves different purpose; such waiver cannot without more be read as implied surrender of right to appeal - Further, Board's Circular directs that SCN must not be waived where legal questions of serious nature are involved, and classification disputes involving technical composition and Chapter Notes fall within such cases - Rivet Mobile Contact is classifiable as electrical contact under Heading 8538, not as precious metal article. Where Revenue seeks to classify goods under heading different from that claimed by assessee, burden rests on Revenue to establish that departure. Revenue's sole material is opinion of jewellery expert regarding silver content, which goes no further than composition and does not address legal question whether goods stand excluded from Chapter 71 by Chapter Note 3(k) and Explanatory Note (d) to Heading 71.15 which exclude electrical contacts - Opinion of technical expert is confined to compositional analysis and cannot determine tariff classification, which is matter for proper officer and appellate authorities - Goods are manufactured to customer's specific drawing, not of standard type usable for other purposes, and are assembled into Moving Contact as part of connectors, switches and relays—uncontroverted evidence of dedicated design and end use. Classification of composite article follows component that gives it essential character and not ingredient that predominates in quantity. Silver serves as electrically conductive material of contact; it does not detract from but subserves the essential character of the Rivet Mobile Contact. Metal contacts designed for switching, protecting circuits or making connections are classifiable under Heading 8538 as parts notwithstanding their precious metal content - Rivet Mobile Contact classifiable under CTH 8538. Confiscation, redemption fine and penalty premised on earlier classification cannot survive – The appeals are allowed [Read less]

GST – Transportation of goods with second E-way Bill generated after expiry of first with modified invoice number – Appellant was imposed penalty under Section 129 of the CGST Act for transportation of goods without valid documents with intention to evade tax. Appellant claimed vehicle met with breakdown and challenged the penalty on ground that the breakdown resulted from circumstances beyond their control and no intention to evade tax was present – Whether generation of second E-way Bill without extension as per Rule 138(10) of the CGST Rules, 2017, with modified invoice number and with altered place of dispatch, c... [Read more]

GST – Transportation of goods with second E-way Bill generated after expiry of first with modified invoice number – Appellant was imposed penalty under Section 129 of the CGST Act for transportation of goods without valid documents with intention to evade tax. Appellant claimed vehicle met with breakdown and challenged the penalty on ground that the breakdown resulted from circumstances beyond their control and no intention to evade tax was present – Whether generation of second E-way Bill without extension as per Rule 138(10) of the CGST Rules, 2017, with modified invoice number and with altered place of dispatch, constitutes transportation of goods with mala fide intention to evade tax under Section 129 – HELD - Rule 138(10) provides for extension of E-way Bill within 8 hours of expiry but does not authorize generation of fresh E-way Bill on the basis of same invoice. The breakdown claim lacks substantiation as no actual location has been disclosed, no proof of vehicle repair has been provided, and no explanation has been given regarding how goods were transported from Orai to Kachora Ghat, Etawah. The generation of second E-way Bill with the same invoice number was possible only by modifying the invoice number by inserting zero prior to invoice number. The improbable theory of breakdown, absence of proof, uninterrupted passage from Manjusar to Orai, and loading of goods from Kachora Ghat instead of Orai, establish on preponderance of probabilities that the second E-way Bill was the product of fraud and deception with intention to evade tax - The facts do not constitute mere typographical or clerical error. The circumstantial evidence clearly shows that goods transported would have reached destination and an effort was made to supply goods loaded from a different place with forged invoice number in E-way Bill. The liability to impose penalty under Section 129 stands substantiated – The impugned orders affirmed and the appeal is dismissed [Read less]

Service Tax – Inclusion of Insurance Premium in Taxable Value of Banking and Financial Service – Appellant, a microfinance company, facilitated group insurance coverage for borrowers, collecting insurance premium from customers and remitting the entire amount to the insurance company without any markup or retention, while separately collecting administrative charges for facilitation services - Department sought to include the entire amount collected as Insurance Income in the taxable value of appellant's Banking and Financial Service – Whether insurance premium represents consideration for service rendered by appella... [Read more]

Service Tax – Inclusion of Insurance Premium in Taxable Value of Banking and Financial Service – Appellant, a microfinance company, facilitated group insurance coverage for borrowers, collecting insurance premium from customers and remitting the entire amount to the insurance company without any markup or retention, while separately collecting administrative charges for facilitation services - Department sought to include the entire amount collected as Insurance Income in the taxable value of appellant's Banking and Financial Service – Whether insurance premium represents consideration for service rendered by appellant or constitutes pass-through receipts excludible from taxable value – HELD – Section 67(1)(i) requires nexus between consideration received and service actually rendered. An amount that merely passes through the service provider's hands without adding to the provider's own remuneration falls outside the definition of taxable value. The principle affirmed by the Supreme Court in Union of India v. Intercontinental Consultants is that reimbursable or pass-through expenditure bearing no nexus with the service rendered cannot be brought within the measure of taxable value under Section 67 - The insurance premium collected and remitted in full by the appellant without any markup constitutes pass-through receipts not representing consideration for service rendered by the appellant. The administrative charges collected for facilitation of insurance represent the only consideration flowing to the appellant for its service and appropriately remain subject to service tax - The demand of service tax on the insurance premium component is set aside. Penalty imposed is not sustainable as no elements of fraud or wilful suppression are established. The demand concerning administrative charges remains undisturbed – The appeal is partly allowed [Read less]

GST – Concurrent jurisdiction and parallel proceedings – Investigation into fraudulent availment of Input Tax Credit on invoices without corresponding actual supply of goods – State GST authorities initiated proceedings under Section 73 of DGST Act, which resulted in orders. Simultaneously, Central tax authorities (DGGI/DZU) initiated parallel proceedings under Section 74 of CGST Act for the same period and subject matter - Whether Central authorities' proceedings are barred by Section 6(2)(b) of CGST Act which provides for embargo on parallel proceedings when the subject matter is the same - HELD - The proceedings i... [Read more]

GST – Concurrent jurisdiction and parallel proceedings – Investigation into fraudulent availment of Input Tax Credit on invoices without corresponding actual supply of goods – State GST authorities initiated proceedings under Section 73 of DGST Act, which resulted in orders. Simultaneously, Central tax authorities (DGGI/DZU) initiated parallel proceedings under Section 74 of CGST Act for the same period and subject matter - Whether Central authorities' proceedings are barred by Section 6(2)(b) of CGST Act which provides for embargo on parallel proceedings when the subject matter is the same - HELD - The proceedings initiated by both State and Central authorities relate to the same subject matter and concern fraudulent availment of ITC for the identical assessment period. However, the position as on date is materially different from the position which existed when the writ petition was instituted. The challenge is no longer confined to a SCN. An Order-in-Original has since been passed determining the liability of the Petitioner. Once an Order-in-Original has been passed, the petitioner has an adequate statutory remedy of appeal under Section 107 of CGST Act - The High Court should not exercise extraordinary writ jurisdiction in such circumstances as the petitioner is not left without remedy - The question whether the two sets of proceedings concern the “same subject matter” within the meaning of Section 6(2)(b) of the CGST Act would require factual examination – Further, the issue regarding applicability of Section 6(2)(b) embargo on concurrent jurisdiction becomes academic when a substantive order has been passed and statutory appeal remedy is available – The mere fact that the Writ Petition had been instituted before the passing of the Order-in-Original would not require this Court to adjudicate the challenge to the Order-in-Original in the first instance, particularly when the statutory appellate mechanism is available after the adjudication order has been passed - The petitioner must pursue the statutory remedy of appeal rather than writ jurisdiction. The writ petition is dismissed and petitioner is relegated to statutory remedy [Read less]

GST – Concurrent jurisdiction and parallel proceedings – Receiving of fraudulent Input Tax Credit invoices from a supplier without actual supply of goods – SGST authorities initiated proceedings under Section 73 and passed order. Subsequently, CGST authorities initiated parallel proceedings under Section 74 of the CGST Act, 2017 based on investigation revealing fraudulent Input Tax Credit through bogus transactions - Whether Central proceedings under Section 74 are barred by Section 6(2)(b) when State proceedings under Section 73 already dealt with same subject matter – HELD – The expression "same subject matter"... [Read more]

GST – Concurrent jurisdiction and parallel proceedings – Receiving of fraudulent Input Tax Credit invoices from a supplier without actual supply of goods – SGST authorities initiated proceedings under Section 73 and passed order. Subsequently, CGST authorities initiated parallel proceedings under Section 74 of the CGST Act, 2017 based on investigation revealing fraudulent Input Tax Credit through bogus transactions - Whether Central proceedings under Section 74 are barred by Section 6(2)(b) when State proceedings under Section 73 already dealt with same subject matter – HELD – The expression "same subject matter" refers to the particular liability or contravention sought to be adjudicated. Distinct infractions would not become same subject matter merely because they relate to same assessee, period or involve similar tax liability. Although both relate to Input Tax Credit from same supplier, the nature of allegation is materially different. State proceedings concerned general Input Tax Credit demand whereas Central proceedings were specifically founded on investigation regarding fraudulent availment through transactions without actual supply of goods - State proceedings did not adjudicate upon allegation that transactions were bogus. Petitioner failed to establish that very contravention of fraudulent availment through bogus transactions had already been adjudicated by State authority. Central proceedings are not ex facie barred by Section 6(2)(b). Impugned Orders are appealable under Section 107 of CGST Act - Where issues require examination of adjudication record and disputed questions of fact, High Court ordinarily does not exercise extraordinary jurisdiction in substitution of statutory appellate mechanism. Petitioner has not established exceptional circumstances warranting interference – The writ petition is dismissed. Petitioner shall be at liberty to avail statutory remedy of appeal under the CGST Act - Applicability of Section 6(2)(b) – HELD - The mere fact that both proceedings relate to the same Financial Year and involve Input Tax Credit of the same amount cannot by themselves establish identity of subject matter; for the statutory bar under Section 6(2)(b) to operate, it is necessary to establish identity of the liability or contravention which forms the subject matter of the two proceedings - The difference in GSTINs of supplier referred to in the two Central proceedings is a relevant circumstance while determining whether the proceedings relate to the same supplier and the same subject matter, but such difference cannot, by itself, be treated as conclusive and the nature of the liability and the contravention alleged in the respective proceedings has to be examined - The statutory appellate authority, while examining the appeals, would be competent to consider the complete record and determine whether there is any duplication or overlapping liability in accordance with law. [Read less]

GST – Refund of accumulated input tax credit in case of inverted duty structure – Application of Circular No.135/05/2020 restricting refund applies when inputs attract higher GST rate than outputs – Respondent engaged in scouring, dyeing and washing of grey fabric on job-work basis. Inputs such as chemicals, dyes and consumables used in processing attract GST at 18% and 12%, whereas outward supply of processed fabrics attracts GST at 5% - Original authority rejected refund claims on basis of CBIC Circular No.135/05/2020-GST, para 3.2, contending that inverted duty structure refund is not available when input and outp... [Read more]

GST – Refund of accumulated input tax credit in case of inverted duty structure – Application of Circular No.135/05/2020 restricting refund applies when inputs attract higher GST rate than outputs – Respondent engaged in scouring, dyeing and washing of grey fabric on job-work basis. Inputs such as chemicals, dyes and consumables used in processing attract GST at 18% and 12%, whereas outward supply of processed fabrics attracts GST at 5% - Original authority rejected refund claims on basis of CBIC Circular No.135/05/2020-GST, para 3.2, contending that inverted duty structure refund is not available when input and output supplies are the same. First appellate authority allowed the refund claims and directed original adjudicating authority to review and recalculate the refund amount - Revenue appealed on ground that FAA exceeded its jurisdiction by remanding case to adjudicating authority under Section 107(11) of CGST Act – Whether Circular No.135/05/2020-GST applies to case of inverted duty structure where inputs attract higher GST rate than outputs – HELD - The Circular No.135/05/2020 applies only to cases where there is reduction in GST rate on the same goods at different points in time. The provisions of Circular specifically state that where input and output are the same goods though attracting different tax rates at different points in time, refund is not available under Section 54(3)(ii) - In present case, there is genuine inverted duty structure where inputs attract higher GST rate (18%/12%) than outputs (5%). This is different from rate reduction scenario covered by the circular - The final product when sold in open market attracts same rate of GST. There is no reduction in GST rate. As per Hon'ble High Court of Madras in M/s Vindhya Spinning Mills case, if there is higher rate of tax on inputs compared to outputs, the party is entitled to refund of unutilised input tax credit – Revenue appeal is dismissed - Power of FAA to remand the matter for recalculation or re-quantification of refund amount – HELD - Once first appellate authority decides major legal issue in appeal, directing recalculation or re-quantification of refund amount in accordance with appellate findings is not remand under Section 107(11). First appellate authority did not leave refund claim open for fresh adjudication but directed ministerial re-computation to give effect to its findings. Such consequential direction cannot be equated with prohibited remand. The fact that refund was subsequently re-worked and already sanctioned and paid demonstrates that appellate order was workable and capable of implementation. Thus, the contention of the Revenue regarding remand of the case is not correct. [Read less]

GST - Maintainability of successive writ petitions - Successive writ petition after withdrawal - In response to show-cause notice for multiple financial years, petitioner had earlier filed two writ petitions challenging same order - Both earlier petitions were withdrawn, first without seeking liberty to file fresh petition and second with liberty to file better petition - Present writ petition filed raising identical issues and seeking identical reliefs - Whether successive writ petition is maintainable after withdrawal of earlier petitions - HELD - A successive writ petition on same cause of action is not maintainable as ... [Read more]

GST - Maintainability of successive writ petitions - Successive writ petition after withdrawal - In response to show-cause notice for multiple financial years, petitioner had earlier filed two writ petitions challenging same order - Both earlier petitions were withdrawn, first without seeking liberty to file fresh petition and second with liberty to file better petition - Present writ petition filed raising identical issues and seeking identical reliefs - Whether successive writ petition is maintainable after withdrawal of earlier petitions - HELD - A successive writ petition on same cause of action is not maintainable as matter of public policy when earlier writ petitions have been withdrawn by petitioner - Withdrawal of writ petition without leave means petitioner abandons claim and it would be open to petitioner to withdraw petition but if withdrawal is without leave of Court it amounts to abandonment of remedy under Article 226. Public policy requires that person should not start fresh round of litigation and Court will not allow to re-agitate claim which he himself had given up earlier - Petitioner had alternative remedy available under Section 107 of GST Act which prescribes period of three months from date of communication of order to file appeal before Appellate Authority with discretion to condone delay up to further one month. Petitioner approached Court with unexplained delay of approximately one year from date of Order-in-Original. Court is not inclined to entertain successive writ petition questioning self-same Order-in-Original which was subject-matter of challenge in earlier petitions - Successive writ petition constitutes fresh round of litigation on same cause of action and is not entertainable after withdrawal of earlier petitions - Writ petition stands dismissed on ground of lack of maintainability [Read less]

GST – Validity of search and seizure of advocate's premises and protection of confidential client material, Investigation into petitioner’s role beyond that of an Advocate providing professional services - Petitioner, an advocate, challenged search conducted at the office premises and in the cabin used by the petitioner, as well as seizure of CPU and documents – Authorisation for search under Section 67(2) of the CGST Act, 2017 on the basis that the petitioner was rendering professional services to a company and allegedly was himself involved in the affairs and operations of the company under investigation - Whether ... [Read more]

GST – Validity of search and seizure of advocate's premises and protection of confidential client material, Investigation into petitioner’s role beyond that of an Advocate providing professional services - Petitioner, an advocate, challenged search conducted at the office premises and in the cabin used by the petitioner, as well as seizure of CPU and documents – Authorisation for search under Section 67(2) of the CGST Act, 2017 on the basis that the petitioner was rendering professional services to a company and allegedly was himself involved in the affairs and operations of the company under investigation - Whether the search conducted at the office of an advocate could be held to be unauthorized merely on the ground that the petitioner is an advocate and advocate-client privilege operates as an bar against investigation into the conduct of the advocate himself – HELD - The search of the premises of an advocate, including the cabin used by the petitioner, was carried out pursuant to a valid authorization issued under Section 67(2) of the CGST Act and cannot be held to be unauthorized merely because the petitioner is an advocate - The question is whether the Dept had material which warranted investigation into the petitioner’s role beyond that of an Advocate providing professional services to MTPL assumes significance because the protection available to professional communications cannot be equated with an immunity from investigation into the Advocate’s own conduct or activities, where such activities are themselves the subject matter of investigation - The protection of advocate-client privilege is intended to preserve confidentiality of communications made in the course of professional relationship between an advocate and his client, and does not follow merely from the fact that material is found in the office or possession of an advocate - Material relating to the independent affairs, transactions or activities of the advocate himself cannot, merely by reason of its being found in his office, be placed beyond the reach of a lawful investigation. Such privilege cannot operate as an absolute bar against investigation into the conduct of the advocate himself where the respondents have placed prima facie material indicating that the petitioner may have acted beyond the role of a legal adviser – The search of the premises of the firm, including the cabin used by the Petitioner, was carried out pursuant to a valid authorization issued under Section 67(2) of the CGST Act and cannot be held to be unauthorized merely because the petitioner is an Advocate - The writ petition is dismissed with interim orders regarding safeguards for examination and identification of privileged and confidential material belonging to third-party clients being maintained – The Writ Petition is dismissed - Petitioner contends that the Respondents having earlier stated that the person looking after the operations and finances and was the main key person for the company, now alleging that the petitioner was also actively involved in the affairs of MTPL – HELD - In the considered view of the Court, there is no inconsistency in the two stands merely because the investigation has subsequently brought forth material concerning the role of another person - An investigation is not static and, with the progress of investigation and collection of further material, the Investigating Agency is entitled to examine the role of persons who may subsequently emerge as having a connection with the transactions under investigation. The fact that a particular person was earlier described as the person looking after the operations or finances of the company does not, by itself, exclude the possibility of another person having an active or consequential role. The subsequent attribution of a role to the Petitioner, therefore, cannot, without more, be characterised as a change of stand or as changing the goalpost - Validity of Search - Adherence to Instructions No.02/2022 and the Master Circular – HELD - The statutory power of search under Section 67 of the CGST Act has to be exercised in accordance with the conditions prescribed by the statute. Administrative instructions and circulars may regulate the manner in which such power is to be exercised, but cannot curtail or extinguish a power which the statute itself confers upon the competent authority. Therefore, even if there has been some deviation from the procedure contained in the aforesaid instructions, such deviation would have to be examined in the context of the statutory requirements and the legality of the authorization. In the absence of any demonstrated violation of a mandatory statutory requirement affecting the validity of the authorization or the jurisdiction to conduct the search, such procedural deviation would not, by itself, warrant declaring the entire search illegal - The mere allegation of non-compliance with an administrative procedure, in the absence of any demonstration that the statutory authorization itself was invalid or that the search was conducted without jurisdiction, would not render the search void ab initio - Protection of advocate-client privilege – HELD - The present judgment may not be construed as laying down any general proposition that the status of an Advocate, or the professional relationship between an Advocate and his client, does not attract the protection of advocate-client privilege. The protection accorded to such confidential communications remains an important safeguard in the administration of justice. The conclusion reached in the present case is confined to the peculiar facts and circumstances, where the Respondents have placed material indicating that the Petitioner’s own role and conduct, and not merely the confidential communications between an Advocate and his client, form part of the subject matter of investigation - Nothing contained in this judgment shall be understood as permitting an unrestricted search of an Advocate’s premises or as diluting the protection available to genuinely privileged communications and confidential client material in accordance with law. [Read less]

GST – Classification of supply of food to hospital in-patients by third party caterer, Composite Supply of healthcare service or supply of restaurant service – Appellant outsourced caterer supplied food to in-patients of medical institution under contractual agreement with hospital – Whether supply of food to in-patients by outsourced caterer constitutes composite supply of healthcare service exempt from GST or constitutes taxable supply of restaurant service – HELD - Supply by outsourced caterer does not constitute composite supply within meaning of Section 2(30) of CGST Act, 2017 because caterer makes only single... [Read more]

GST – Classification of supply of food to hospital in-patients by third party caterer, Composite Supply of healthcare service or supply of restaurant service – Appellant outsourced caterer supplied food to in-patients of medical institution under contractual agreement with hospital – Whether supply of food to in-patients by outsourced caterer constitutes composite supply of healthcare service exempt from GST or constitutes taxable supply of restaurant service – HELD - Supply by outsourced caterer does not constitute composite supply within meaning of Section 2(30) of CGST Act, 2017 because caterer makes only single supply of food and not two or more taxable supplies naturally bundled together - The Board's clarification No. 32/06/2018-GST dated 12.02.2018 regarding composite supply of healthcare service applies only to healthcare service provider directly supplying food to in-patients as part of healthcare service, not to outsourced caterers - The caterer supplied food to hospital under agreement and hospital is direct recipient of supply though food ultimately consumed by in-patients. Caterer was under mistaken belief that Board's clarification applies to their supply but such clarification has no bearing on caterer's supply. Outsourced caterer liable to pay GST on food supplied for in-patient consumption – The FAA, without understanding the clarification of the Board, has erred in concluding that the supplies in the hands of the Respondent is that of composite supply. However, the respondent is entitled to cum-tax-benefit under Rule 35; proper officer directed to re-determine liability extending cum-tax valuation benefit - The order impugned is set aside and Revenue appeal is partly allowed - Levy of Penalty under Section 74 – Respondent-caterer did not separately invoice tax on food supplied to in-patients from January 2018 to November 2021 and claimed benefit of Board's clarification on composite healthcare supply – Whether penalty under Section 74 of CGST Act for fraud, willful misstatement or suppression of facts to evade tax is applicable – HELD - Invoking Section 74 requires establishment of ingredients of fraud, willful misstatement or suppression with intent to evade tax. Caterer relied upon Board's clarification albeit mistakenly and did not deliberately choose not to pay tax. This constitutes gross error in understanding provisions of law and clarification, not deliberate evasion or mala fide intention. No concrete evidence establishes necessity for invoking Section 74. Department's own proposal of penalty under Section 122 was dropped by Adjudicating Authority further fortifying that caterer did not deliberately opt against payment of tax - Under Section 75(2), since charges of fraud or willful misstatement or suppression of facts to evade tax not established, show cause notice shall be deemed issued under Section 73(1) and proper officer shall determine tax payable accordingly - Appeal allowed to extent that normal demand procedure under Section 73 applies instead of fraud procedure under Section 74; proper officer directed to re-determine liability considering demand as issued under Section 73(1) - Cum-Tax Valuation and Rule 35 Benefit - Caterer issued invoices for food supply without separately identifying tax component; values represented in invoices admittedly inclusive of any tax to be charged from January 2018 to November 2021 – Whether differential tax should be calculated on entire invoice value or whether benefit of cum-tax principle under Rule 35 of CGST Rules, 2017 should be extended when tax component not separately invoiced – HELD - Rule 35 provides formula for determining tax amount where value of supply is inclusive of integrated tax or central tax or state tax. Present case falls within scope of Rule 35 - Since caterer did not collect tax separately from recipients and no allegation that caterer collected tax over and above invoice value, declared invoice value must be treated as inclusive of tax. Tax component must be extracted in accordance with formula prescribed under Rule 35 – Respondent is entitled to benefit of Rule 35 even though not specifically claimed, as this ensures tax correctly calculated in accordance with prescribed rule and authorities must collect only legally due tax neither more nor less. Proper officer directed to recompute differential tax liability by treating declared value as cum-tax and applying Rule 35 formula after verifying invoices and ascertaining that no amount as tax was collected during period for supplies made for in-patients – Appeal allowed with modification. [Read less]

GST - Jurisdiction of First Appellate Authority to Condone Delay in preferring appeal – Multiple taxpayers-Respondents whose GST registrations were cancelled for failure to file monthly returns for six consecutive months failed to seek revocation within prescribed thirty-day period and instead filed appeals before First Appellate Authority after expiry of statutory period under Section 107(1) of the CGST Act, 2017 - First Appellate Authority condoned delay by relying upon High Court of Telangana decisions - Whether First Appellate Authority possessed jurisdiction to condone delay beyond maximum period prescribed under Se... [Read more]

GST - Jurisdiction of First Appellate Authority to Condone Delay in preferring appeal – Multiple taxpayers-Respondents whose GST registrations were cancelled for failure to file monthly returns for six consecutive months failed to seek revocation within prescribed thirty-day period and instead filed appeals before First Appellate Authority after expiry of statutory period under Section 107(1) of the CGST Act, 2017 - First Appellate Authority condoned delay by relying upon High Court of Telangana decisions - Whether First Appellate Authority possessed jurisdiction to condone delay beyond maximum period prescribed under Section 107(4) of CGST Act – HELD - Section 107(1) prescribes ordinary period of three months for preferring appeal from date of communication of order, while Section 107(4) empowers First Appellate Authority to condone delay only for further period of one month subject to sufficient cause, making maximum condonable period four months - The First Appellate Authority is creature of statute and must act within four corners of enactment; its jurisdiction is conditioned and circumscribed by provisions of Section 107. While High Court may exercise extraordinary jurisdiction under Article 226 to mould relief and condone delay in interests of justice, such constitutional power cannot by judicial osmosis be transplanted to statutory authority - Orders of High Court rendered in exercise of constitutional jurisdiction in peculiar facts and circumstances of those proceedings cannot enlarge statutory jurisdiction of appellate authority. The principle that equity follows law cannot be invoked by statutory authority to override express legislative prescription - First Appellate Authority exceeded bounds of statutory jurisdiction and exercised power ultra vires Section 107 by condoning delay beyond statutory outer limit – First Appellate Authority lacked jurisdiction to condone inordinate delay in filing appeals - Effect of Departmental Implementation on Maintainability of Appeals - Departmental appeal against order allowing revocation of cancelled registration – Department implemented First Appellate Authority's order by restoring registration of taxpayers who thereafter resumed business operations and continue to carry on legitimate business – Whether Department's appeals remain maintainable after Department has acted upon and implemented impugned orders – HELD - After impugned orders were passed, Department acted upon them and restored registrations of concerned respondents. Having implemented those orders and altered respondents' legal and commercial position, Department cannot now seek to invalidate same orders without addressing consequences of its own action. Restoration of registration is subsequent and material development relevant to adjudication which resulted in practical relief sought by respondents and enabled them to resume business activities and comply with statutory obligations. If appeals were allowed, restored registrations would again become liable to cancellation including with retrospective effect, imperiling validity of genuine transactions undertaken by respondents during intervening period, equally without any default on their part - Department, having accepted and implemented impugned orders by restoring registrations, has forfeited practical opportunity to challenge them at belated stage. Department cannot simultaneously rely upon impugned orders for restoring registrations and seek their annulment without explaining or reversing consequences of restoration – Further, Even if departmental objections regarding statutory limitation accepted in principle, no effective relief can presently be granted as department has already acted upon orders and implemented them. Proceedings are futile and constitute avoidable invocation of tribunal's jurisdiction – Department's appeals are disposed of as not maintainable having regard to implementation of impugned orders and restoration of registrations. [Read less]

Central Excise - Cenvat Credit Refund - Correlation and Duty Burden – Appellant claimed refund of accumulated Cenvat credit on inputs which could not be utilised because finished goods were fully exported - Refund claim under Rule 5 of Cenvat Credit Rules and Notification No. 11/2002-CE(NT) was rejected by authorities for want of one-to-one correlation between duty paid inputs and exported goods, item-wise correlation, and other deficiencies - Whether refund could be denied for want of one-to-one correlation and item-wise shipping bill-wise correlation between inputs and exports - HELD - Refund cannot be denied for want ... [Read more]

Central Excise - Cenvat Credit Refund - Correlation and Duty Burden – Appellant claimed refund of accumulated Cenvat credit on inputs which could not be utilised because finished goods were fully exported - Refund claim under Rule 5 of Cenvat Credit Rules and Notification No. 11/2002-CE(NT) was rejected by authorities for want of one-to-one correlation between duty paid inputs and exported goods, item-wise correlation, and other deficiencies - Whether refund could be denied for want of one-to-one correlation and item-wise shipping bill-wise correlation between inputs and exports - HELD - Refund cannot be denied for want of one-to-one correlation between inputs and exports. Neither the rule nor the governing circular requires separate records of exclusive use or one-to-one item-wise correlation. It is sufficient that inputs were used in manufacture of goods which were in fact exported and credit had become incapable of utilisation - The Range Officer's report verified purchase orders, designs and export documents confirming that goods manufactured were properly exported with connected documents produced. Finding denying refund premised on a demand for correlation which law does not require is opposed to the Range Officer's report as it stands on record. The demand for recovery founded on treating refund as erroneous loses its foundation once that finding is reversed – The appeal allowed - Cenvat Credit Refund - Binding Effect of Appellate Finding on Drawback - Appellant claimed refund after full repayment of drawback earlier availed. In earlier appellate order, Commissioner had found that full repayment of drawback removes the bar on refund under Rule 5, based on precedent. Department did not appeal this order - Whether the finding in earlier appellate order that drawback repayment removes the bar on refund remained binding at later stages when department chose not to appeal it - HELD - The finding that full repayment of drawback restores assessee to position where refund is not barred remains conclusive at later stages of same proceeding when not appealed by department. The principle of res judicata operates between different stages of same proceeding so that a finding recorded at earlier stage and not carried further binds parties at later stages. Appealability of an order as whole is distinct from finality of a specific finding within it. The order remanded only documentary verification of quantum and did not remand the separate legal question whether drawback repayment removes bar. That question was answered in favour of appellant and department chose not to appeal - A remand confined to one aspect cannot be standing licence to reopen every other finding each time matter returns in fresh round. Denial of refund on drawback ground was not sustainable – The appeal is allowed [Read less]

Central Excise – Eligibility to CENVAT Credit upon debonding from Export Oriented Unit to Domestic Tariff Area unit – Appellant was engaged in manufacture of cotton terry towels under EOU scheme and subsequently exited the EOU scheme by debonding procedure with permission from Development Commissioner, MEPZ, and became a DTA unit at the same premises – At time of debonding, appellant paid applicable duties on imported and indigenous capital goods, inputs and consumables lying with the unit and availed CENVAT credit of duties so paid – Department alleged that appellant had deliberately exited EOU scheme and availed ... [Read more]

Central Excise – Eligibility to CENVAT Credit upon debonding from Export Oriented Unit to Domestic Tariff Area unit – Appellant was engaged in manufacture of cotton terry towels under EOU scheme and subsequently exited the EOU scheme by debonding procedure with permission from Development Commissioner, MEPZ, and became a DTA unit at the same premises – At time of debonding, appellant paid applicable duties on imported and indigenous capital goods, inputs and consumables lying with the unit and availed CENVAT credit of duties so paid – Department alleged that appellant had deliberately exited EOU scheme and availed inadmissible credit with intention of obtaining rebate on exported finished goods – Whether upon debonding and commencement of manufacture as Domestic Tariff Area unit, appellant is entitled to avail CENVAT credit of eligible duties paid at debonding on raw materials, inputs and capital goods under Rule 3 read with Rule 9 of CCR, 2004 – HELD – Upon debonding and commencement of manufacture as Domestic Tariff Area unit, appellant was entitled to avail CENVAT credit of eligible duties paid at debonding on inputs and capital goods. Fact that goods had originally been procured or held without payment of duty while operating as EOU does not disentitle appellant from taking credit of duty subsequently paid at time of debonding. Eligibility under Rule 3 and compliance with documentary requirements of Rule 9 must be considered together - Where duty paid at debonding is eligible duty under Rule 3 and prescribed documentary requirements are satisfied, credit cannot be denied merely because goods had earlier been held as EOU. Proviso to Rule 3(1) inserted by Notification No. 35/2008 cannot restrict credit only to amount of Central Excise duty on capital goods - The decision of Tribunal in AVO Carbon case relied upon by Revenue was overruled by Hon'ble Madras High Court in Stanadyne Amalgamations case. Following consistent position in subsequent Tribunal decisions, CENVAT credit lying in balance on date of debonding could be transferred and utilised by DTA unit. Department's allegation that appellant deliberately exited scheme to obtain inadmissible credit is without merit. Assessee is free to manage its business in its own best interest and department cannot speculate on commercial decisions so long as no blame worthy conduct is involved – Appeal of appellant is allowed and appeal of Commissioner is rejected [Read less]

Customs – Anti-Dumping Duty – Maintainability of proceedings for recovery of short-levied duties after expiry of levy notification – Appellant imported parts of wind operated electricity generators, classifiable under tariff heading 85030090, which fell within the scope of countervailing duty and anti-dumping duty notifications issued for castings for wind operated electricity generators – The Department issued a show cause notice proposing recovery of differential duty under Section 28 of the Customs Act, and appellant contended that proceedings could not be initiated after the notifications had expired – Whethe... [Read more]

Customs – Anti-Dumping Duty – Maintainability of proceedings for recovery of short-levied duties after expiry of levy notification – Appellant imported parts of wind operated electricity generators, classifiable under tariff heading 85030090, which fell within the scope of countervailing duty and anti-dumping duty notifications issued for castings for wind operated electricity generators – The Department issued a show cause notice proposing recovery of differential duty under Section 28 of the Customs Act, and appellant contended that proceedings could not be initiated after the notifications had expired – Whether recovery proceedings initiated after expiry of the relevant levy notifications are legally maintainable – HELD – Proceedings for recovery of duties short-levied or not levied can be maintained even after expiry of the relevant levy notification, provided the liability accrued during the currency of the notification. The taxable event is the importation of goods, and where goods were imported while the notification was operative and in force, the subsequent expiry of the notification does not extinguish such liability nor does it render recovery proceedings unsustainable under Section 28. Expiry by efflux of time is conceptually distinct from repeal, rescission or amendment. The expiry of a procedural provision or notification cannot obliterate or defeat substantive liability, nor can it extinguish the statutory power to recover duties otherwise lawfully recoverable. Section 28 provides the statutory machinery for demand and recovery of duties that have escaped assessment or collection, notwithstanding the subsequent expiry of the notification. Any interpretation treating expiry as equivalent to repeal would produce anomalous consequences by unsettling concluded actions undertaken during the notification's validity – The appeal is allowed on this issue - Customs – Advance Authorisation Scheme – Entitlement to exemption from countervailing duty and anti-dumping duty – Appellant effected imports under valid Advance Authorisations issued under the Foreign Trade Policy and satisfied the prescribed export obligations as evidenced by Export Obligation Discharge Certificates, Redemption Certificates, Chartered Accountant's Certificates and bond discharge orders – Whether imports effected under valid Advance Authorisations with fulfilled export obligations are entitled to exemption from countervailing duty and anti-dumping duty under Notification No. 18/2015-Customs – HELD – Imports effected under valid Advance Authorisations are entitled to exemption from countervailing duty and anti-dumping duty, provided the conditions prescribed under Notification No. 18/2015-Customs are duly fulfilled. The Notification expressly exempts materials imported against a valid Advance Authorisation from the whole of duty of customs, additional duties, safeguard duty, countervailing duty and anti-dumping duty, subject to fulfilment of prescribed conditions. The statutory scheme incorporates a comprehensive mechanism whereby exemption is granted at the time of import subject to the importer executing a bond and subsequently furnishing satisfactory evidence of fulfilment of export obligation. Once the competent licensing authority issues Export Obligation Discharge Certificates and Redemption Certificates, and the jurisdictional Customs authorities discharge and cancel the statutory bonds, the contingency contemplated for recovery of duty foregone ceases to exist. The Customs authorities cannot disregard valid and subsisting statutory acts and certificates issued by competent authorities in accordance with law. An Export Obligation Discharge Certificate is not a mere declaration but a statutory certificate issued after due verification and is entitled to full legal effect. The rights and liabilities of parties stand conclusively governed by the statutory mechanism embodied in the notification and cannot be determined on the basis of apprehension or speculation – The appeal is allowed and exemption cannot be denied - Customs – Anti-Dumping Duty – Scope of Product Under Consideration – Classification of imported goods as castings for wind operated electricity generators – Appellant contended that imported goods comprised forged components, machined assemblies, fabricated structures, electrical systems and non-casting products falling outside the scope of the Product Under Consideration, supported by technical literature, engineering drawings, metallurgical reports and test reports from CSIR National Metallurgical Laboratory – Whether imported goods answer the statutory description of castings for wind operated electricity generators falling within the scope of respective countervailing duty and anti-dumping duty notifications – HELD – The imported goods do not qualify as castings for wind operated electricity generators within the meaning of the Product Under Consideration. The notifications impose a product-specific levy based on the intrinsic character of the article as a casting, not merely its end-use in wind operated electricity generators. The burden lies upon the Revenue to establish by cogent technical and documentary evidence that each disputed article answers the statutory description of a casting. The Designated Authority has specified that only those goods which retain the essential character of a casting fall within the scope, whereas components manufactured through processes such as forging, fabrication, machining or assembly cannot be brought within scope merely because used ultimately in a wind operated electricity generator. The Department failed to adduce any expert reports, test reports or comparable technical evidence to rebut the appellant's technical material, including the CSIR National Metallurgical Laboratory report concluding that examined articles were forged components and not castings. Scientific evidence concerning manufacturing process of technically specialised engineering products constitutes relevant and material evidence which cannot be brushed aside without adequate reasons. The burden to show that appellant is exigible to tax is squarely on the Department, and this burden has not been discharged – No duty liability survives on the imported goods - Customs – Limitation – Invocation of extended period under Section 28 – Barring of demand for imports crossing statutory outer limit – Appellant contended that part of the demand related to imports which had already crossed the statutory outer limit of five years prescribed under Section 28(4) of the Customs Act, and that an earlier show cause notice dated 29.01.2018 covering substantially similar imports demonstrated that the Department was already aware of the nature of goods – Whether demand relating to imports beyond the statutory outer limit of five years is sustainable, and whether the extended period can be invoked for substantially similar imports already covered by an earlier show cause notice – HELD – The demand insofar as it relates to imports falling beyond the statutory outer limit prescribed under Section 28(4) of the Customs Act is barred by limitation and cannot be sustained. Section 28 itself prescribes the maximum period within which proceedings may be initiated by invoking the extended period, and any demand travelling beyond this maximum period is ex-facie barred by limitation. Further, where the Department has already issued a show cause notice on certain facts, it cannot ordinarily invoke the extended period again on the basis of the very same material, since suppression or wilful misstatement cannot be alleged in respect of facts already within its knowledge. The nature of appellant's imports was well known to the Department at the time of issuance of the earlier SCN, and therefore the Department cannot invoke the extended period of limitation once again. Suppression must be deliberate, wilful and with intention to evade duty, and a mere dispute relating to classi [Read less]

Service Tax – Refund for service tax paid on ocean freight – Period of Limitation – Whether a refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944 where filed more than one year after payment, and whether such time-bar does not apply where the levy is held to be unconstitutional – HELD – The refund claim is barred by limitation under Section 11B. Clause (f) of Explanation (B) of Section 11B provides that the relevant date for calculating the limitation period is the date of payment of duty. Where the refund application is filed after expiry of one year from the date of payment, t... [Read more]

Service Tax – Refund for service tax paid on ocean freight – Period of Limitation – Whether a refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944 where filed more than one year after payment, and whether such time-bar does not apply where the levy is held to be unconstitutional – HELD – The refund claim is barred by limitation under Section 11B. Clause (f) of Explanation (B) of Section 11B provides that the relevant date for calculating the limitation period is the date of payment of duty. Where the refund application is filed after expiry of one year from the date of payment, the claim is caught by limitation - Although Appellant contended that time-bar does not apply as the levy was held unconstitutional, the Supreme Court in Mafatlal Industries recognized that Section 11B is a complete code for refunds, with an exception only where a provision is found to be unconstitutional for violation of constitutional limitations. Such claims arising from unconstitutional levies must be pursued under Article 226 or 32 of the Constitution, not through the Tribunal - The Tribunal's jurisdiction is limited to powers expressly conferred by statute and it cannot condone delay beyond the limits prescribed in the Act. It is on record that the claim was filed beyond payment of tax. Hence, the said claim is hit by limitation as prescribed under the Act – The appeal is dismissed and the order of the Commissioner (Appeals) is upheld [Read less]

GST - Difference between GSTR-3B and GSTR-2A - Demand created on mechanical comparison without verification - Whether entire difference can be treated as ineligible ITC without examining reconciliation and supporting evidence and whether appellant received effective opportunity of hearing - HELD - The entire difference between GSTR-3B and GSTR-2A cannot be treated as ineligible ITC without examining the appellant's reconciliation and supporting evidence - The burden under Section 155 of the CGST Act, 2017 remains upon the appellant, however, the entire difference between GSTR-3B and GSTR-2A cannot be treated as ineligible ... [Read more]

GST - Difference between GSTR-3B and GSTR-2A - Demand created on mechanical comparison without verification - Whether entire difference can be treated as ineligible ITC without examining reconciliation and supporting evidence and whether appellant received effective opportunity of hearing - HELD - The entire difference between GSTR-3B and GSTR-2A cannot be treated as ineligible ITC without examining the appellant's reconciliation and supporting evidence - The burden under Section 155 of the CGST Act, 2017 remains upon the appellant, however, the entire difference between GSTR-3B and GSTR-2A cannot be treated as ineligible ITC without examining the appellant’s reconciliation and supporting evidence - The adjudicating authority is required to undertake a category-wise and invoice-wise verification of the documents and evidence furnished by the appellant and determine the eligibility of ITC in accordance with Sections 16 and 155 of the CGST Act, 2017 -Further, the appellant was not provided an effective opportunity of hearing before the adjudicating authority, though the first appellate authority had granted multiple opportunities to appear - The order-in-original and order-in-appeal are set aside. The matter is remanded to the adjudicating authority to consider all certificates mentioned in the findings and verify these from records and examine all other issues on merits by affording an opportunity of being heard to the appellant in the interests of justice - The appeal is allowed by remand [Read less]

GST – Refund of accumulated input tax credit due to inverted duty structure – Respondent claimed refund of accumulated ITC due to inverted duty structure under Section 54(3) read with Rule 89(5). Original refund claims were rejected on ground they were filed manually instead of electronically on GST portal. After remand by first appellate authority, respondent re-filed five refund claims - Proper officer rejected all claims contending that amended formula under Notification No.14/2022-Central Tax dated 05.07.2022 is prospective only and that restriction under Notification No.09/2022-Central Tax (Rate) dated 18.07.2022 ... [Read more]

GST – Refund of accumulated input tax credit due to inverted duty structure – Respondent claimed refund of accumulated ITC due to inverted duty structure under Section 54(3) read with Rule 89(5). Original refund claims were rejected on ground they were filed manually instead of electronically on GST portal. After remand by first appellate authority, respondent re-filed five refund claims - Proper officer rejected all claims contending that amended formula under Notification No.14/2022-Central Tax dated 05.07.2022 is prospective only and that restriction under Notification No.09/2022-Central Tax (Rate) dated 18.07.2022 restricts refund for specified goods falling under Chapters 15 and 27 - First appellate authority allowed appeals and directed to sanction refunds. Department appeal contending that amended formula should not be applied to refund claims for periods prior to 05.07.2022 – Whether amended formula is prospective or retrospective; whether restriction under Notification No.09/2022 applies to ITC accumulated before 18.07.2022; and whether supplementary refund claims are permissible – HELD – The amendment made by Notification No.14/2022-Central Tax in Rule 89(5) is curative and clarificatory in nature and is applicable retrospectively to refund or rectification applications filed within period prescribed under Section 54(1) – The Hon'ble Gujarat High Court in Ascent Meditech Ltd. held amendment is curative and clarificatory in nature and should be applied retrospectively. Supreme Court dismissed Department's SLP against this decision, thereby upholding High Court's view - A circular cannot prevail over statutory provisions. The Circular No.181/13/2022 cannot restrict benefits otherwise available under statutory provisions – Further, there is no restriction in filing supplementary or differential refund claims provided filed within prescribed limitation period. The supplementary refund claims for left out amounts due to inadvertent errors within statutory period are permissible – The Limitation objection is not sustainable as Notification No.13/2022 excludes period 01.03.2020 to 28.02.2022 from limitation computation. First Appellate Authority examined all relevant issues and gave reasons for allowing refund claims based on CGST Act/Rules and judicial decisions – The Order of First Appellate Authority upheld and Revenue appeal is rejected [Read less]

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exce... [Read more]

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exception precisely because it takes a case outside the general rule. The burden lies upon the Revenue to disclose which exception is being invoked demonstrating that the statutory discretion was actually exercised in the particular case - Permission to institute an appeal is not the same as statutory compliance and a mere assertion that the appeal has been filed with the approval or authorisation of the Commissioner is insufficient - The monetary-limit principle is one of institutional discipline. The object of appellate adjudication is not to provide an unrestricted forum for Governmental disagreement with every adverse order - The Revenue has failed to establish that the present appeal falls within any recognised exception. No material has been produced demonstrating a specific, reasoned and legally cognisable exercise of the Commissioner's residual power in the present case - The appeal does not satisfy the conditions governing its admission and maintainability before this Tribunal - The appeal is dismissed at the threshold on the ground of the prescribed monetary limit [Read less]

Central Excise – Eligibility of CENVAT Credit availed CENVAT credit on various services including Brokerage and Commission, Detention Charges, Insurance Services, Membership Fees, Rent-a-Cab Service and Staff Welfare Expenses – Department alleged that these services were not categorized as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and initiated proceedings leading to demand and penalty – Whether disputed services qualify as input service for purpose of availing CENVAT credit – HELD – Services relating to Brokerage and Commission, Detention Charges, Insurance and Membership Fees qualify as input s... [Read more]

Central Excise – Eligibility of CENVAT Credit availed CENVAT credit on various services including Brokerage and Commission, Detention Charges, Insurance Services, Membership Fees, Rent-a-Cab Service and Staff Welfare Expenses – Department alleged that these services were not categorized as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and initiated proceedings leading to demand and penalty – Whether disputed services qualify as input service for purpose of availing CENVAT credit – HELD – Services relating to Brokerage and Commission, Detention Charges, Insurance and Membership Fees qualify as input services and appellant is entitled to avail CENVAT credit thereon - Brokerage and Commission services fall under sales promotion which is expressly included in definition of input service - Detention charges incurred in connection with imported goods and raw materials intended for manufacture of final products and included in value of goods for accounting purpose qualify as input service under main part of definition - Insurance premiums paid for insuring plant and machinery, stock and goods in transit at factory premises do not fall under exclusion and thus qualify as input service - Membership fees paid for participation in exhibitions and sales promotion activities have direct nexus with manufacture of goods and qualify as input service, more so after amendment w.e.f. 03.02.2016 providing that sales promotion includes services by way of sale of dutiable goods on commission basis - However, Rent-a-Cab service does not qualify as input service which appellant correctly reversed. Staff Welfare Expenses for canteen and transportation facilities do not qualify as input service - Wrong availment or utilization of CENVAT credit without involving fraud, collusion or misstatement attracts penalty of 10% of irregularly availed credit under Rule 15 read with Section 11AC of Central Excise Act, not 50%. Quantum of penalty should be confined to 10% only for irregularly availed credit on Rent-a-Cab service and Staff Welfare Expenses – The appeal is partly allowed [Read less]

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exce... [Read more]

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exception precisely because it takes a case outside the general rule. The burden lies upon the Revenue to disclose which exception is being invoked, what facts bring the case within that exception, what statutory or administrative provision supports the invocation and where residual discretion is relied upon, the order or recorded opinion demonstrating that the statutory discretion was actually exercised in the particular case - Permission to institute an appeal is not the same as statutory compliance and a mere assertion that the appeal has been filed with the approval or authorisation of the Commissioner is insufficient - The monetary-limit principle is one of institutional discipline. The object of appellate adjudication is not to provide an unrestricted forum for Governmental disagreement with every adverse order - The Revenue has failed to establish that the present appeal falls within any recognised exception. No material has been produced demonstrating a specific, reasoned and legally cognisable exercise of the Commissioner's residual power in the present case - The appeal does not satisfy the conditions governing its admission and maintainability before this Tribunal - The appeal is dismissed at the threshold on the ground of the prescribed monetary limit [Read less]

GST – Classification of licensing of copyright in cinematographic films - Temporary transfer of intellectual property rights in cinematographic films licensed by producer to distributors for commercial exploitation – Tax authorities classified the licensing as Information Technology Software services attracting 18% GST instead of temporary transfer of IP rights in goods other than IT software attracting 12% – Whether licensing of copyright in cinematographic films is classifiable under SAC 998340 (ITSS) at 18% GST or under SAC 997332 (licensing services for right to broadcast and show original films) at 12% GST – H... [Read more]

GST – Classification of licensing of copyright in cinematographic films - Temporary transfer of intellectual property rights in cinematographic films licensed by producer to distributors for commercial exploitation – Tax authorities classified the licensing as Information Technology Software services attracting 18% GST instead of temporary transfer of IP rights in goods other than IT software attracting 12% – Whether licensing of copyright in cinematographic films is classifiable under SAC 998340 (ITSS) at 18% GST or under SAC 997332 (licensing services for right to broadcast and show original films) at 12% GST – HELD - The licensing of copyright in cinematographic films is classifiable under SAC 997332 and attracts 12% GST, and not under IT software classification - Entry 5(c) of Schedule II to CGST Act treats temporary transfer or permitting use or enjoyment of any IPR as supply of service. A cinematographic film is a passive audio-visual work incapable of execution, manipulation or inter-activity as required by the statutory definition of information technology software, which means any representation of instructions, data, sound or image capable of being manipulated or providing interactivity by means of a computer or automatic data processing machine - The scheme of classification of services consciously creates two separate and distinct taxable entries under Heading 9973 namely SAC 997331 for computer software and SAC 997332 specifically for licensing services for right to broadcast and show original films, sound recordings and television programmes. Group 99733 separately lists these two codes demonstrating that cinematographic content licensing cannot be subsumed within software - The impugned orders suffered from manifest and unreasoned errors of law by collapsing two admittedly distinct SACs into one without independent reasoning or explaining the statutory basis. The mode of delivery whether physical hard disks or electronic transmission cannot determine classification, which must turn on essential character of supply - Administrative clarifications by Prasar Bharati and alert Circulars support SAC 997332 for licensing by original copyright holder and expressly distinguish this from distribution of films by distributors to exhibitors classifiable under SAC 999614 at 18% - CBIC circulars dated 11.10.2024 acknowledge the long-standing overlap and ambiguity in classification prior to 01.10.2021 and regularise payment on ‘as is where is’ basis thereby permitting the entire chain of exploitation from producer to distributor to exhibitor to attract uniform treatment. The classification of theatrical rights cannot change when distributor licenses exhibitor - The Revenue reliance on statement of Post-Production Head was erroneous as it was never furnished to the petitioner and spoke only of mode of transmission without technical material or executable program - The impugned orders are quashed. The writ petitions are allowedrnrn^Whether mode of delivery is relevant to classification – HELD - Whether content is transmitted physically or electronically, the mode of delivery cannot determine classification, which must turn on the essential character of the supply. Equating “digital content” with “software”, the core error underlying the impugned orders, has no statutory basis - A ground taken for the first time in the Affidavit-in-Reply by the Respondents contending that the petitioner's services fall within “Online Information Database Access and Retrieval” services whereas, neither the SCN, Orders-in-Original nor Orders-in-Appeal contains any discussion or finding on the contention that the petitioner's services fall within “OIDAR” services. It is settled law that an adjudicating/appellate order cannot be improved upon or supplemented by an affidavit before the writ court; its validity must be tested on the reasoning it actually contains – Further, the respondents’ reliance on the ‘Aspect Theory’ to treat “mode of delivery” as an independent classification criterion is misconceived - The ‘Aspect Theory’ operates in the field of legislative competence, permitting different legislatures to tax different aspects of the same transaction under distinct fields of legislation and has no application to classification on a single supply under a single statute. The dominant nature and essential character of the supply, not its mode of transmission, must govern classification. [Read less]

Andhra Pradesh Value Added Tax Act, 2005 - Taxability of bus hire transactions under Section 4(8) of APVAT Act, 2005 – Petitioner operated buses under hire agreements with State Transport Corporation for specified periods with fixed charges – Whether transactions constitute "deemed sale" liable to tax at stipulated rate – HELD – The terms of hire agreements clearly evidenced that buses were given on hire, not sold. Owner's retention of exclusive physical control and operational responsibility negated any transfer of right to use. Mere permission to use goods during hire period does not amount to transfer of right t... [Read more]

Andhra Pradesh Value Added Tax Act, 2005 - Taxability of bus hire transactions under Section 4(8) of APVAT Act, 2005 – Petitioner operated buses under hire agreements with State Transport Corporation for specified periods with fixed charges – Whether transactions constitute "deemed sale" liable to tax at stipulated rate – HELD – The terms of hire agreements clearly evidenced that buses were given on hire, not sold. Owner's retention of exclusive physical control and operational responsibility negated any transfer of right to use. Mere permission to use goods during hire period does not amount to transfer of right to use as contemplated by Section 4(8) - Transactions do not constitute deemed sale as required transfer of right to use was absent. The buses remained exclusively under Petitioner's physical control, possession, and operation throughout the hire period. Petitioner retained full responsibility for plying buses, manning same, bearing statutory obligations including wages and vehicle maintenance. The agreements were structured merely as licenses to use goods for fixed periods with specified terms, not transfers of possession or control. The distinction between transfer of right to use goods and mere license to use is critical for determining deemed sale status. No transfer of possession, control, or liberty to utilize buses as owner wished was granted to the State Transport Corporation. The Notification exempting services by way of giving vehicles on hire to State Transport undertakings provided additional protection - The Assessment Orders passed against the petitioners are quashed - The writ petitions are allowed [Read less]

GST - Provisional attachment of bank accounts under Section 83 CGST Act - Cessation of Provisional attachment after one year - Petitioners, relatives of persons involved in company under investigation for issuing fake invoices, had their bank accounts provisionally attached on 19.05.2022 and 23.05.2022 without service of order in Form GST DRC-22 - Petitioners submitted representations for revocation of freezing but no response received from respondent authorities - Whether provisional attachment orders continue to operate beyond one year from the date of issuance - HELD - Under Section 83(2) of the CGST Act, read with Rule... [Read more]

GST - Provisional attachment of bank accounts under Section 83 CGST Act - Cessation of Provisional attachment after one year - Petitioners, relatives of persons involved in company under investigation for issuing fake invoices, had their bank accounts provisionally attached on 19.05.2022 and 23.05.2022 without service of order in Form GST DRC-22 - Petitioners submitted representations for revocation of freezing but no response received from respondent authorities - Whether provisional attachment orders continue to operate beyond one year from the date of issuance - HELD - Under Section 83(2) of the CGST Act, read with Rule 159 of the CGST Rules, 2017, every provisional attachment ceases to have effect after the expiry of one year from the date of the order made under sub-section (1) - The power to levy provisional attachment is draconian and the statute contemplates attachment during pendency of proceedings under stipulated statutory provisions. A provisional attachment is a pre-emptive measure to protect interest of Government revenue and cannot function as recovery measure - The Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh, and Keshari Nandan Mobile v. Office of Assistant Commissioner of State Tax, held that draconian power conferred by sub-section (1) must be construed so that sub-section (2) is not rendered otiose. Once enquiry culminates into final demand, recourse must be had to appropriate provisions under statute for recovery of tax, interest, penalty - In the present case, provisional attachment orders dated 19.05.2022 and 23.05.2022 ceased to have effect on 19.05.2023 and 23.05.2023 respectively. No Show Cause Notice was issued to petitioners and there is no reason to prevent petitioners from operating their bank accounts - Bank accounts of petitioners shall stand de-freezed and be made operable forthwith – The writ petitions are allowed [Read less]

GST - Kerala AAR – Scope of phrase “Educational institution” - GST Exemption on Education and Training Programs - Coaching and Training for Professional Qualifications - Applicant provided coaching and training services for professional courses such as Chartered Accountancy, ACCA, CMA, CPA and similar qualifications offered by government-recognised professional bodies - Whether applicant qualifies as educational institution under Notification No. 12/2017 and whether coaching services for externally-conducted professional qualifications are exempt from GST - HELD - Applicant does not qualify as educational institution... [Read more]

GST - Kerala AAR – Scope of phrase “Educational institution” - GST Exemption on Education and Training Programs - Coaching and Training for Professional Qualifications - Applicant provided coaching and training services for professional courses such as Chartered Accountancy, ACCA, CMA, CPA and similar qualifications offered by government-recognised professional bodies - Whether applicant qualifies as educational institution under Notification No. 12/2017 and whether coaching services for externally-conducted professional qualifications are exempt from GST - HELD - Applicant does not qualify as educational institution within meaning of clause (y) of paragraph 2 of Notification No. 12/2017 because applicant is not providing education directly as part of curriculum leading to recognised qualification - Educational institution means institution providing education as part of curriculum for obtaining qualification recognised by law. Applicant provides coaching and training to prepare students for examinations and qualifications conducted and awarded by professional bodies and universities, but itself neither conducts examinations nor awards qualifications - Fact that qualifications for which coaching imparted are recognised by law and courses conducted by government-acknowledged professional bodies is irrelevant. Essential requirement is that applicant must itself provide the prescribed curriculum and award the degree or qualification - Applicant acts as coaching institute offering preparatory coaching for examinations conducted by external bodies which does not bring it within definition of educational institution. There is distinction between conducting degree courses leading to recognised qualifications and providing preparatory coaching for examinations conducted by other bodies - Exemption under Serial No. 66 of Notification No. 12/2017-CT(R) not applicable to applicant's education programme and training services – Ordered accordingly - GST on Collection and Remittance of Examination Fees - Applicant collected examination fees, registration fees, subscription fees and other related charges from students payable to professional bodies and universities and remitted same without markup - Whether collection and remittance of such fees without charging separate consideration attracts GST and whether applicant qualifies as pure agent - HELD - Applicant has not established that examination fees and other charges collected from students and remitted to professional bodies and universities were received in capacity of pure agent within meaning of Rule 33 of CGST Rules, 2017 - Rule 33 provides that where supplier acts as pure agent of recipient of supply, expenditure or costs incurred by supplier can be excluded from value of supply if all prescribed conditions satisfied. Conditions require that supplier acts as pure agent under contractual agreement, that payment made on behalf of recipient be separately indicated in invoice, and that supplies procured as pure agent be in addition to services supplied on own account - Applicant has not clarified whether examination fees collected were under authorisation from students to act as pure agent or whether such amounts separately indicated in invoices issued to students - In absence of these material facts, Authority cannot hold that applicant acted as pure agent. Accordingly, amounts collected for examination fees and other charges cannot be excluded from taxable value of services supplied by applicant unless all conditions of Rule 33 are satisfied - GST on Textbooks and Study Materials - Applicant provided coaching and training with printed study materials, digital learning resources, recorded lectures and academic content as integral part without separate charge - Whether supply of textbooks and study materials qualifies for exemption or forms part of composite supply - HELD - Printed textbooks, printed study materials and digital learning resources are not independent supply but rather integral part of composite supply of commercial training and coaching services. Supply of textbooks and study materials along with coaching and training form composite supply where coaching and training services constitute principal supply - Supplies cannot be artificially segregated into supply of training services and supply of study materials when nature of transaction is composite supply. Fact that single consolidated fee charged for complete coaching programme including classroom sessions, printed materials and digital resources reinforces that materials form integral component of overall educational service. Study materials supplied only to students enrolled in applicant's courses and not available for independent purchase. Exemption available under Serial No. 119 of Notification No. 2/2017 for printed books cannot be claimed as supply does not qualify as independent supply of books - Printed study materials and resources as part of composite supply attract GST rate applicable to principal supply which is commercial training and coaching services. Supply therefore not eligible for exemption under notification provisions relating to books - GST on Foreign Exchange Fluctuations - Forex Gain or Loss - Whether Constitutes Consideration for Supply - Foreign exchange fluctuations arising on course registration and examination fees paid to foreign professional bodies - Whether foreign exchange differential retained by applicant constitutes consideration for supply and attracts GST - HELD - Differential amount arising on foreign exchange fluctuations in respect of course registration fees, examination fees, subscription fees and other charges payable to foreign professional bodies and retained by applicant does not constitute consideration for any taxable supply made by applicant - Section 2(102) of CGST Act provides that services include activity relating to conversion of money only if separate consideration charged for such activity. Foreign exchange movement can result in gain or loss and therefore cannot represent separate consideration. Occasional gain from forex fluctuations even if retained by applicant falls outside GST framework as no certain nexus exists between consideration and services rendered by applicant - Foreign exchange gain or loss is recognized in accounting records in accordance with accounting standards and neither passed on to nor recovered from students. Therefore differential amount arising on forex fluctuations not required to be included in taxable value of supply. Since no corresponding taxable supply exists for said amount, question of applicable SAC does not arise - GST on Redemption of Training Fees from Universities - Taxability of Support Services to Educational Institutions - Redemption of Training Fees - Applicant acted as training partner for university programmes providing training, coaching, academic support and infrastructure, receiving consideration as percentage of tuition fees collected - Whether support services provided to universities attract GST and applicable rate - HELD - Amounts received from universities as consideration for education and training activities carried out by applicant constitute consideration for taxable supply under Heading 9992 and are liable to GST at 18% in absence of applicable exemption - Applicant does not qualify as educational institution and therefore services provided to universities cannot claim exemption under Serial No. 66(a) of Notification No. 12/2017 which applies only to services provided by educational institutions. Services provided do not fall within categories specified under Serial No. 66(b) relating to transportation, catering, security, cleaning, admission or examination services to educational institutions -The activities of applicant in providing support services to universities are not covered under any exemption category. Redemption of training fees received from universities represents consideration for support services provided whic [Read less]

GST – Kerala AAR - Section 2(6) and Section 2(13) of IGST Act, 2017 - Export of services or Intermediary Service - Educational consultancy services - Applicant, an educational consultants firm, entered into agency agreement with foreign universities to facilitate recruitment and enrollment of students from India in return for commission payable upon actual enrollment and receipt of tuition fees – Applicant contention that services rendered to foreign universities constitute export of services under Section 2(6) of IGST Act and not intermediary services - Whether the services rendered by applicant to overseas universiti... [Read more]

GST – Kerala AAR - Section 2(6) and Section 2(13) of IGST Act, 2017 - Export of services or Intermediary Service - Educational consultancy services - Applicant, an educational consultants firm, entered into agency agreement with foreign universities to facilitate recruitment and enrollment of students from India in return for commission payable upon actual enrollment and receipt of tuition fees – Applicant contention that services rendered to foreign universities constitute export of services under Section 2(6) of IGST Act and not intermediary services - Whether the services rendered by applicant to overseas universities for enrollment of students qualify as export of services under Section 2(6) of IGST Act, 2017 - HELD - The applicant performs no independent supply on own account as it neither offers educational courses nor undertakes any part of teaching or academic instruction. The applicant is acting as an agent of the university in India and merely arranging and facilitating admission process between the university and prospective students, thereby constituting intermediary services as defined in Section 2(13) of IGST Act. - The place of supply for intermediary services is determined by the applicable statutory provisions which changed effective 30.03.2026 - For the period up to 29.03.2026, the place of supply was the location of supplier (India) as per clause (b) of Section 13(8) of IGST Act, resulting in services not qualifying as export of services under Section 2(6). Post omission of clause (b) of Section 13(8) effective 30.03.2026, the place of supply is governed by Section 13(2) and determined as location of recipient (outside India), whereby services thereafter qualify as export of services - Services do not qualify as export of services for the period up to 29.03.2026, whereas from 30.03.2026 onwards, the services qualify as export of services – Ordered accordingly - Definition of intermediary - Whether the services are to be classified as intermediary services within the meaning of Section 2(13) of IGST Act, 2017 - HELD - The services constitute intermediary services within the meaning of Section 2(13) of IGST Act. The arrangement involves three parties (university, applicant, prospective students) and two distinct supplies in accordance with the structure prescribed in CBIC Circular No. 159/15/2021-GST dated 20.09.2021 for intermediary arrangements - The main supply is educational services by the university to students, and the applicant's function is to arrange and facilitate such main supply between the two principals - The applicant is acting as an agent of the university evidenced by the agreement. The applicant's restricted authority as demonstrated by restrictions on collecting fees directly and incurring obligations without prior consent signifies that applicant acts under control of the principal and not on its own account - The applicant's remuneration is contingent upon successful completion of enrollment and continuation of student enrollment with the university, establishing no direct nexus between consideration and claimed recruitment services. The applicant neither offers educational courses nor undertakes teaching, academic instruction or delivery of educational services. The applicant merely facilitates the provision of educational services by the university to prospective students and does not supply the underlying services on its own account, thus satisfying the definition of intermediary under Section 2(13) of IGST Act, 2017. [Read less]

GST – Kerala AAR - Health Insurance – Exemption under Sl. No. 40 of Notification No. 12/2017-Central Tax (Rate) – Applicant-insurance company selected by Government of Kerala to implement MEDISEP Phase-II covering State Government employees, pensioners and eligible family members – Government undertook to pay entire annual premium of Rs. 8,244/- per Beneficiary Family Unit – Whether health insurance services provided to Government of Kerala under MEDISEP Phase-II in respect of identified beneficiaries are covered under Sl. No. 40 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and therefore exempt... [Read more]

GST – Kerala AAR - Health Insurance – Exemption under Sl. No. 40 of Notification No. 12/2017-Central Tax (Rate) – Applicant-insurance company selected by Government of Kerala to implement MEDISEP Phase-II covering State Government employees, pensioners and eligible family members – Government undertook to pay entire annual premium of Rs. 8,244/- per Beneficiary Family Unit – Whether health insurance services provided to Government of Kerala under MEDISEP Phase-II in respect of identified beneficiaries are covered under Sl. No. 40 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and therefore exempt from GST – HELD – The Sl. No. 40 exemption requires three conditions i.e. services provided to Central Government, State Government or Union Territory; services provided under insurance scheme; and total premium paid by government. The Notification does not stipulate that Government itself be insured person or receive insurance benefits or that scheme relate only to government property – The expression "any insurance scheme" is of wide amplitude not restricted to schemes covering government property - Government is solely liable to pay entire premium in respect of beneficiaries under contractual terms. Employees, pensioners and family members are insured beneficiaries whose identity does not undermine that insurance service is supplied to Government - Government of Kerala is recipient of service under Section 2(93) definition as it is liable to pay consideration - CBIC Circular No. 16/16/2017-GST supports that exemption applies where entire premium paid by government, identity of insured persons not determining factor - All conditions of Sl. No. 40 is satisfied; health insurance services exempt from GST subject to continued fulfillment of condition that entire premium remains payable by Government – Ordered accordingly [Read less]

GST – Kerala AAR - Classification of Printing Service as Job Work - Printing Activity on Customer-Supplied Materials - Applicant engaged in printing services on paper and content supplied by customer using printer's own consumables, sought classification under SAC 9988 - Whether activity of printing on customer-supplied paper and content constitutes job work within meaning of Section 2(68) of CGST Act, 2017 - HELD - Printing activity undertaken on customer-supplied paper and content using printer's own consumables is classifiable under Heading 9988 as manufacturing services on physical inputs owned by others. However, ch... [Read more]

GST – Kerala AAR - Classification of Printing Service as Job Work - Printing Activity on Customer-Supplied Materials - Applicant engaged in printing services on paper and content supplied by customer using printer's own consumables, sought classification under SAC 9988 - Whether activity of printing on customer-supplied paper and content constitutes job work within meaning of Section 2(68) of CGST Act, 2017 - HELD - Printing activity undertaken on customer-supplied paper and content using printer's own consumables is classifiable under Heading 9988 as manufacturing services on physical inputs owned by others. However, characterization as job work within definition of Section 2(68) depends on whether recipient of services is registered person under GST - Job work requires treatment or process on goods belonging to another registered person. Where customer is unregistered person, activity constitutes services by way of treatment or process on goods belonging to another person but not job work as strictly defined – The activity would be considered as Job Work only if the customer/recipient of such services provided by the applicant is registered under GST. In other cases, it would be classified as services by way of any treatment or process on goods belonging to another person – Ordered accordingly - Concessional Rate Applicability for Printing Services - GST Rate for Printing of Goods under Chapters 48 and 49 - Applicant sought confirmation whether printing services on customer-supplied materials qualify for concessional rate of 5% under Entry No. 26 of Notification No. 11/2017-CT(R) when printed goods fall under Chapters 48 or 49 - Whether printing services related to goods under Chapters 48 or 49 are eligible for 5% or standard 18% rate - HELD - Printing services classifiable under Heading 9988 are eligible for concessional rate of 5% only when services fall within specific sub-entries of Entry 26 namely sub-entries (ii)(e), (ii)(f), (v)(a) and (v)(b). Sub-entry (ii)(e) covers job work for printing of newspapers, books including Braille books, journals and periodicals. Sub-entry (ii)(f) covers job work for printing of all goods falling under Chapters 48 or 49 attracting central tax at 2.5% or Nil. Corresponding sub-entries (v)(a) and (v)(b) apply to services by way of treatment or process on goods of unregistered persons. Concessional rate benefit restricted to goods under Chapters 48 or 49 which themselves attract central tax at 2.5% or Nil rate. In all other cases where printing does not fall within specified categories, GST payable at standard rate of 18% under residual sub-entries (iv) and (vii). Applicability of concessional rate depends on actual tariff classification and tax rate of printed output - Printing of Religious Books - Supply of Service or Supply of Goods - Applicant engaged in printing of religious texts and extracts where content provided by customer or sourced from public domain and paper and consumables supplied by printer - Whether printing of religious books with customer-supplied content and printer-supplied materials is supply of goods or service and applicable rate - HELD - Printing of religious texts or extracts where content supplied by customer or sourced from public domain and materials supplied by printer constitutes composite supply of services with principal supply being printing service. Supplies of paper and consumables are ancillary to principal supply of printing service. Applying principles of composite supply under Section 8 read with Sections 2(30) and 2(90) of CGST Act, taxability determined by nature of principal supply - Circular No. 11/11/2017-GST dated 20.10.2017 establishes that where content supplied by publisher or person owning usage rights and printer uses own physical inputs including paper, principal supply is printing service while supply of materials ancillary. Applicant executing customer-specific printing orders rather than independently publishing books on own account. Distinctive factor is whether printer independently publishing and supplying books or merely executing customer-directed printing orders - Activity classifiable as supply of printing service under SAC 9989 taxable at 18% under Entry 27(ii) of Notification 11/2017. Fact that printed material consists of religious books or extracts irrelevant to characterization. Benefit of Nil or concessional rate applicable to printed books cannot extend merely because output in book form or contains religious literature. [Read less]

GST – Kerala AAR - Tariff Classification and applicable GST rate on Herbal Extract Product – Nutraceutical Supplement versus Medicament – Applicant manufactured herbal extract product through steam distillation with water-based preparation method – Whether product qualifies as medicament under Chapter 30, nutraceutical under Heading 2106, or aromatic preparation under Chapter 33 of Customs Tariff – HELD – Product marketed as wellness supplement for general health support without specific disease treatment claims does not meet criteria for classification as medicament. The essential character test and common par... [Read more]

GST – Kerala AAR - Tariff Classification and applicable GST rate on Herbal Extract Product – Nutraceutical Supplement versus Medicament – Applicant manufactured herbal extract product through steam distillation with water-based preparation method – Whether product qualifies as medicament under Chapter 30, nutraceutical under Heading 2106, or aromatic preparation under Chapter 33 of Customs Tariff – HELD – Product marketed as wellness supplement for general health support without specific disease treatment claims does not meet criteria for classification as medicament. The essential character test and common parlance test are decisive in classification matters, not the mere presence of ingredients with therapeutic properties - Medicaments are ordinarily supported by therapeutic claims, dosage discipline and regulatory recognition under Drugs and Cosmetics Act, 1940, which applicant did not possess. Product appropriately classifiable as nutraceutical or dietary supplement under Heading 2106 reflecting applicant's license from relevant food safety authority and intended use for nutritional supplementation - Classification under Chapter 33 rejected as product lacks aromatic character and is not marketed or used in perfumery, cosmetics or flavouring applications – The product is intended for direct human consumption as a dietary supplement for general wellness and nutritional support. The product is essentially a water based extract of turmeric, containing negligible quantities of turmeric derived constituents and consisting predominantly of water. In trade parlance, such products are understood and marketed as nutraceutical or dietary supplements rather than as pharmaceutical preparations or aromatic extracts. Therefore, considering the composition, manner of presentation, intended use and consumer perception, the essential character of the impugned product is that of a food preparation meant for nutritional or wellness supplementation, which appropriately falls within the scope of Heading 2106 - Price or MRP by itself does not determine classification unless specific value-linked condition in notification applies. Product initially taxable at rate of 18% as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, as amended, subsequently reduced to 5% by Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025, effective from 22.09.2025 – Ordered accordingly [Read less]

GST – Kerala AAR - Exemption for Vocational Training Services - NSQF-Aligned Qualification Training - Applicant accredited as training partner with Sector Skill Council recognized by National Council for Vocational Education and Training, providing structured vocational training for repair and maintenance of handheld electronic devices aligned with National Skill Qualification Framework - Whether training services provided by accredited training body for NSQF-aligned qualifications with NCVET-approved qualification package qualify for GST exemption under Entry No. 69 of Notification No. 12/2017-CT(Rate) - HELD - the appl... [Read more]

GST – Kerala AAR - Exemption for Vocational Training Services - NSQF-Aligned Qualification Training - Applicant accredited as training partner with Sector Skill Council recognized by National Council for Vocational Education and Training, providing structured vocational training for repair and maintenance of handheld electronic devices aligned with National Skill Qualification Framework - Whether training services provided by accredited training body for NSQF-aligned qualifications with NCVET-approved qualification package qualify for GST exemption under Entry No. 69 of Notification No. 12/2017-CT(Rate) - HELD - the applicant is an accredited training partner of TSSC, which is an Awarding Body recognized by NCVET and therefore, the training courses offered by the applicant viz “Handheld Devices (Handset & Tablet) Technician” and “Line Assembler-Telecom Products” which are NSQF-aligned qualifications under NCVET, comes within the ambit of item (e)(iii) of Entry No. 69 of Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended, and are exempt from GST with effect from 10.10.2024 - Structured vocational training delivered through approved curriculum with theory, practical sessions and employability skills components for nationally recognized skill development qualifications constitute exempted training services – The applicable SAC is 999294-‘Other education and training services nowhere else classified’ - Ordered accordingly [Read less]

GST - Kerala AAR - Classification of Construction Services in respect of villa projects constructed and sold after 01.04.2019 - Residential Villa Projects other than “Ongoing Projects” - Applicant engaged in construction of residential villas in real estate projects commenced after 01.04.2019 - Classification and SAC of construction services supplied to buyers in other than ongoing projects in view of the amendment made in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 vide Notification No.3/2019-Central Tax (Rate) dated 29/03/2019 - HELD - Construction of residential villas other than affordable resident... [Read more]

GST - Kerala AAR - Classification of Construction Services in respect of villa projects constructed and sold after 01.04.2019 - Residential Villa Projects other than “Ongoing Projects” - Applicant engaged in construction of residential villas in real estate projects commenced after 01.04.2019 - Classification and SAC of construction services supplied to buyers in other than ongoing projects in view of the amendment made in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 vide Notification No.3/2019-Central Tax (Rate) dated 29/03/2019 - HELD - Construction of residential villas other than affordable residential apartments by promoter in Residential Real Estate Project which commences on or after 01.04.2019 is appropriately classified under SAC 995411 as general construction services of single dwelling or multi-dwelling or multi-storied residential buildings - Services are classifiable under Entry 3(ia) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended by Notification No. 3/2019-CT(Rate). Applicant qualifies as developer-promoter as defined in explanation to Entry 3 for constructing villas which fall within category of residential apartments other than affordable residential apartments in RREP. Additional modification works and ancillary services provided during project stage prior to completion certificate or first occupation and forming part of original construction agreement should be treated as integral part of construction service and classified under same SAC 995411. Where additional works constitute separate and independent supply not part of original construction, classification shall be determined based on specific nature of such service – Ordered accordingly - Applicable Rate of Tax for Villa Construction Services - Applicable rate of tax for villa construction services under Entry 3(ia) and valuation where supply involves transfer of land - HELD - Supply of construction services relating to residential villas other than affordable residential apartments in RREP taxable under Entry 3(ia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended at rate of 3.75% CGST and 3.75% SGST subject to conditions prescribed - Where supply involves transfer of property in land or undivided share of land, value of land deemed to be one-third of total amount charged and GST payable on remaining two-thirds of consideration. This valuation provision results in effective GST rate of 5% on total value. Additional modification works and ancillary services forming part of construction of residential villas prior to issuance of completion certificate or first occupation treated as part of same supply and taxable at same rate applicable to principal supply under Entry 3(ia). Where such works constitute separate and independent supply not forming part of construction of residential apartments in RREP, applicable rate determined based on classification of service under notification - Eligibility for Input Tax Credit on Supplies for Villa Construction - Whether input tax credit available for goods and services used in construction under Entry 3(ia) - HELD - Applicant not eligible to avail or utilise ITC of tax paid on inputs and input services used for construction of residential villas in projects other than ongoing projects taxable under Entry 3(ia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended - Entry 3(ia) prescribes concessional rate of tax subject to condition that credit of input tax charged on goods and services used in supplying construction service shall not be taken. Accordingly, in respect of residential villa projects commencing on or after 01.04.2019, applicant required to discharge tax at applicable rate under Entry 3(ia) without availment of input tax credit - Where additional modification works and ancillary services form part of construction of villas in RREP prior to completion, such services treated as part of same supply taxable under Entry 3(ia) and input tax credit not available. However, where such additional works constitute separate and independent supply not forming part of construction of villas in RREP, eligibility to avail input tax credit determined in accordance with provisions of CGST Act - Utilisation of ITC availed under Protest - Whether ITC retained in electronic credit ledger can be adjusted against tax liability or whether option exists to opt for higher rate with ITC availment - HELD - Applicant not entitled to avail or utilise ITC stated to have been availed under protest in respect of projects other than ongoing projects taxable under Entry 3(ia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended - Entry 3(ia) prescribes applicable rate subject to condition that input tax credit on goods and services used shall not be taken and tax payable required to be discharged in cash through electronic cash ledger only. Applicant cannot utilise balance ITC lying in electronic credit ledger for discharging output tax liability at rate prescribed under Entry 3(ia) for residential villa projects commencing on or after 01.04.2019 - Applicant has no option to choose higher rate of tax for purpose of utilizing balance ITC available in electronic credit ledger. Option to continue under earlier rate structure with ITC was available only for eligible ongoing projects not for projects commencing after 01.04.2019. Any ITC wrongly availed in respect of projects commencing after 01.04.2019 even if not utilised shall be reversed or paid back in accordance with CGST Act provisions. Transitional mechanism under Notification 03/2019 relevant only for ongoing projects transitioning to revised rate structure. [Read less]