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Service Tax - Leviability of Service Tax on Route Navigation Facility Charges [RNFC] and Terminal Navigation Landing Charges [TNLC] along with the liability on certain Miscellaneous Income – Appellant was providing Route Navigation Facility Charges (RNFC) and Terminal Navigation Landing Charges (TNLC) to airlines - On the issue of leviability of service tax on RNFC, the Tribunal had earlier remanded the matter for de-novo adjudication to determine whether the entire RNFC service was provided within the airport/civil enclave. In the re-adjudication, the revenue authorities confirmed the demand on RNFC as well as TNLC sinc... [Read more]

Service Tax - Leviability of Service Tax on Route Navigation Facility Charges [RNFC] and Terminal Navigation Landing Charges [TNLC] along with the liability on certain Miscellaneous Income – Appellant was providing Route Navigation Facility Charges (RNFC) and Terminal Navigation Landing Charges (TNLC) to airlines - On the issue of leviability of service tax on RNFC, the Tribunal had earlier remanded the matter for de-novo adjudication to determine whether the entire RNFC service was provided within the airport/civil enclave. In the re-adjudication, the revenue authorities confirmed the demand on RNFC as well as TNLC since the appellant failed to provide any evidence that the RNFC service was provided outside the airport/civil enclave – HELD - The Tribunal has clearly held that only if the entire RNFC/TNLC services is provided within airport/civil enclaves, then the same can be held to be exigible to service tax - The RNFC covers communication, navigation, and surveillance services provided while an aircraft is flying through Indian airspace, including overflying flights. These services are provided throughout the route from the starting point to the destination, with the help of Aeronautical Communication Stations located every 100 kms and manned by separate personnel. Hence, the entire RNFC service is not provided within the airport/civil enclave. Consequently, the RNFC is not exigible to service tax. However, the TNLC is a charge for assisting the aircraft during the terminal landing phase and use of airport facilities, which is provided exclusively within the airport/civil enclave. Therefore, the TNLC is held to be exigible to service tax - The demand on RNFC is set aside, while the demand on TNLC is upheld and remanded only for quantification. The demand on Miscellaneous Income is set aside. The show cause notice is held to be within the normal limitation period – The appeal is partly allowed - Issue 2: Service Tax on Miscellaneous Income - The revenue authorities had also demanded service tax on the appellant's Miscellaneous Income, which included profit on sale of fixed assets, interest on staff advances, and sale of scrap. HELD - The nature of the Miscellaneous Income does not relate to the provision of any service, and hence, it is not exigible to service tax. Further, appellant being a Central Government Organization would not intentionally evade payment of legitimate dues. Hence, accept the contentions of the appellant and set-aside the demand confirmed under this head. Issue 3: Limitation Period - The revenue authorities had issued the show cause notice within one year from the date of filing of the periodical ST-3 returns by the appellant, which is within the normal limitation period as per the provisions of the Finance Act, 1994. Accordingly, the demand is held to be within the normal limitation period. [Read less]

Central Excise - Manufacture - The appellant, a small-scale unit listed in DGS&D rate contract, manufactured and supplied 'Folding Cot' to Indian para-military forces. The revenue authorities raised a demand for central excise duty on the ground that the fabrication of the Folding Cot amounted to 'manufacture' under Section 2(f) of the Central Excise Act, 1944 - Whether the fabrication of Folding Cot by the appellant would amount to 'manufacture' – HELD - The process of cutting, bending, and welding of MS black pipes by the appellant to fabricate the Folding Cot resulted in a distinct and marketable product, and therefor... [Read more]

Central Excise - Manufacture - The appellant, a small-scale unit listed in DGS&D rate contract, manufactured and supplied 'Folding Cot' to Indian para-military forces. The revenue authorities raised a demand for central excise duty on the ground that the fabrication of the Folding Cot amounted to 'manufacture' under Section 2(f) of the Central Excise Act, 1944 - Whether the fabrication of Folding Cot by the appellant would amount to 'manufacture' – HELD - The process of cutting, bending, and welding of MS black pipes by the appellant to fabricate the Folding Cot resulted in a distinct and marketable product, and therefore, the activity would amount to 'manufacture' under Section 2(f) of the CEA - The folding cots are manufactured products in terms of Section 2(f) of the CEA 1944 and the duty liability worked out is required to be paid along with interest - The appellant had a bonafide belief that the fabrication of Folding Cot was not excisable, and they had neither charged nor remitted the excise duty. Considering these facts and that the major portion of the demand was set aside, the penalty imposed on both the appellant firm and its partner are set aside – The appeal is partly allowed - Value addition - The revenue authorities included the value of the 'Plywood Top' procured by the appellant and supplied along with the Folding Cot in determining the assessable value - Whether the value of the Plywood Top can be included in the assessable value of the Folding Cot – HELD - The Plywood Top was a trading item procured by the appellant from the open market and supplied as per the requirement of the buyers. The value of the bought-out items like Plywood Top cannot be included in the assessable value of the manufactured goods (Folding Cot). The demand on this count is set aside. [Read less]

Central Excise - Admissibility of CENVAT credit on various input services – Admissibility of Cenvat Credit on insurance services, taxi services, courier services, and installation and commissioning services - HELD - The assessee could successfully demonstrate that the services in question were used in the business of the assessee and therefore, the credit is admissible. The Tribunal relied on various judicial precedents supporting the assessee's contentions and allowed the appeal filed by the appellant - The appeal filed by the appellant is allowed - Admissibility of CENVAT credit on freight services - HELD - The High Co... [Read more]

Central Excise - Admissibility of CENVAT credit on various input services – Admissibility of Cenvat Credit on insurance services, taxi services, courier services, and installation and commissioning services - HELD - The assessee could successfully demonstrate that the services in question were used in the business of the assessee and therefore, the credit is admissible. The Tribunal relied on various judicial precedents supporting the assessee's contentions and allowed the appeal filed by the appellant - The appeal filed by the appellant is allowed - Admissibility of CENVAT credit on freight services - HELD - The High Court of Himachal Pradesh has held that where the sale price is inclusive of freight charges, CENVAT credit is admissible even after the amendment in 2011 - The assessee had availed the credit after a favorable decision by the Tribunal in the assessee's own case and had duly informed the department - However, the Learned Commissioner had not given any reasons for his conclusion that the freight services were not covered within the definition of input services - Therefore, the Tribunal partially allowed the revenue's appeal and remanded the matter back to the adjudicating authority to ascertain the quantity of credit admissible to the assessee on the service tax paid on freight, after going through the relevant documents and Chartered Accountant's certificate. [Read less]

Customs - Valuation of goods, Two different invoices for the same consignment - The Commissioner rejected the declared value under the Customs Valuation Rules and re-determined the value under Rule 9. The Commissioner also imposed confiscation of goods under Section 111(f) and 111(m) of the Customs Act, 1962, redemption fines, and penalties - Whether the Commissioner was justified in rejecting the declared value and re-determining the value under Rule 9 of the Customs Valuation Rules - HELD - The Commissioner had reasonable doubt about the truth and accuracy of the declared value, as appellant had produced two different in... [Read more]

Customs - Valuation of goods, Two different invoices for the same consignment - The Commissioner rejected the declared value under the Customs Valuation Rules and re-determined the value under Rule 9. The Commissioner also imposed confiscation of goods under Section 111(f) and 111(m) of the Customs Act, 1962, redemption fines, and penalties - Whether the Commissioner was justified in rejecting the declared value and re-determining the value under Rule 9 of the Customs Valuation Rules - HELD - The Commissioner had reasonable doubt about the truth and accuracy of the declared value, as appellant had produced two different invoices showing vastly different values for the same consignment. Therefore, the Commissioner was justified in rejecting the declared value under Rule 12 and re-determining the value under Rule 9 – The re-assessment of the Bill of Entry is upheld. However, the penalty imposed is reduced - The case is not covered under Section 111(f), as the dispute was regarding the invoices produced by the importer and not about the goods mentioned in the IGM. Further, in the absence of any reference to a Bill of Entry, the confiscation under Section 111(m) could not be sustained. Accordingly, the confiscation of goods and the redemption fines imposed are set aside – The appeal is partly allowed [Read less]

Customs - Undervaluation of imported goods - Rejection of declared value under Rule 12 and sequential redetermination under Rules 3 to 9 of CVR, 2007 - The Customs Department issued a Show Cause Notice proposing rejection of the declared value under Rule 12 of the Customs Valuation Rules, 2009, and redetermination of value under Rules 3, 4, and 9 - Whether the Department has discharged its burden of proving the undervaluation of the imported goods – HELD - The Customs Valuation Rules, 2007 prescribe transaction value as the primary basis for valuation under Rule 3(1), subject to Rule 12. Once the proper officer entertain... [Read more]

Customs - Undervaluation of imported goods - Rejection of declared value under Rule 12 and sequential redetermination under Rules 3 to 9 of CVR, 2007 - The Customs Department issued a Show Cause Notice proposing rejection of the declared value under Rule 12 of the Customs Valuation Rules, 2009, and redetermination of value under Rules 3, 4, and 9 - Whether the Department has discharged its burden of proving the undervaluation of the imported goods – HELD - The Customs Valuation Rules, 2007 prescribe transaction value as the primary basis for valuation under Rule 3(1), subject to Rule 12. Once the proper officer entertains reasonable doubt as to the truth or accuracy of the declared value, Rule 12 is triggered. In the present case, the Department has established a prima facie case of mis-declaration of value through documentary evidence, including email correspondence and account statements. The burden then shifted to the importer to provide a credible explanation, which the importer failed to do. The Department has, therefore, discharged its burden of proving the undervaluation of the goods - The redetermination of the assessable value is upheld the confiscation of goods, fine, and penalty imposed are set aside – The appeal is partly allowed - Issue 2 - Whether the Department can issue a demand under Section 28 of the Customs Act prior to the finalization of provisional assessment – HELD - The assessment of the goods was done provisionally following the orders of the Madras High Court. The penal provisions under Sections 111(m) and 112(a) of the Customs Act are not attracted in such cases. However, the issuance of the Show Cause Notice has not caused any prejudice to the appellant, as the appellant failed to participate in the proceedings for finalization of the assessment - Issue 3: Rejection of demand for cross-examination of witnesses - The Department relied on the statements of certain witnesses whose statements were recorded during the investigation. The appellant requested cross-examination of these witnesses, which was denied by the adjudicating authority - Whether the appellant has a right to cross-examine the witnesses whose statements were relied upon by the Department – HELD - The right to cross-examine a witness is not an absolute right and the assessee must make out a case for cross-examination by providing specific reasons. A blanket request to cross-examine all persons whose statements have been recorded cannot be sustained. In the present case, the appellant did not question the veracity of the data retrieved from the electronic devices and the statements of the appellant themselves corroborated the findings. Therefore, the request for cross-examination was rightly denied and did not cause any prejudice to the appellant - The denial of the request for cross-examination of the witnesses by the appellant is upheld [Read less]

Central Excise - Denial of Cenvat Credit on input services received for job work - Appellant availed Cenvat Credit on inputs and input services used for the manufacture of excisable goods - Whether the appellant is entitled to avail Cenvat Credit on the input services received for job work services for printing of metal sheets, even though the said services were held to be covered under the negative list under Section 66D(f) of the Finance Act, 1994 – HELD - In the instant case disputed invoices were raised by the job worker under a belief, may be erroneous, that such service was taxable and it had paid the tax that was ... [Read more]

Central Excise - Denial of Cenvat Credit on input services received for job work - Appellant availed Cenvat Credit on inputs and input services used for the manufacture of excisable goods - Whether the appellant is entitled to avail Cenvat Credit on the input services received for job work services for printing of metal sheets, even though the said services were held to be covered under the negative list under Section 66D(f) of the Finance Act, 1994 – HELD - In the instant case disputed invoices were raised by the job worker under a belief, may be erroneous, that such service was taxable and it had paid the tax that was appropriated by the Department under self-assessment provision - The quantum of tax already determined by the Jurisdictional office of the supplier unit (the service provider) cannot be contested or challenged by the Officer-in-Charge of the recipient unit (the appellant) - Once the taxes are paid by the service tax provider, the manufacture of the excisable final product is allowed to take Cenvat Credit of the duties and taxes enumerated under the Cenvat Credit Rules 2004. The error, if any, is not on the part of the appellant but on the part of the service provider (job worker) who issued the invoices through which payment of service tax was not denied, nor receipt of the same by the Department, nor even use of such service by the appellant, which is the main criteria for allowing Cenvat Credit on input services - The denial of Cenvat Credit is set aside and the appeal is allowed [Read less]

The decisions of Delhi High Court upholding the validity of consolidated SCNs for multiple assessment years, which were subsequently upheld by Supreme Court by dismissing the SLPs, are not speaking orders and do not constitute binding precedents.

Service Tax - Exemption from Service Tax on Horticulture Services - The appellant was engaged in providing horticulture services such as upkeep of gardens by watering, sweeping, fertilization, spraying of insecticides, etc. The Department issued a Show Cause Notice demanding Service Tax based on alleged differences between Form 26AS and ST-3 returns - Whether the horticulture services provided by the appellant are exempt from Service Tax - HELD - The term "agriculture" is of wide compass and covers horticulture, which in turn covers gardening activities. The appellant's activities of cultivation of plants, their protection... [Read more]

Service Tax - Exemption from Service Tax on Horticulture Services - The appellant was engaged in providing horticulture services such as upkeep of gardens by watering, sweeping, fertilization, spraying of insecticides, etc. The Department issued a Show Cause Notice demanding Service Tax based on alleged differences between Form 26AS and ST-3 returns - Whether the horticulture services provided by the appellant are exempt from Service Tax - HELD - The term "agriculture" is of wide compass and covers horticulture, which in turn covers gardening activities. The appellant's activities of cultivation of plants, their protection, and related operations fall under the definition of "horticulture" and are part of agricultural activity, which is exempt from Service Tax - The horticulture services provided by the appellant, such as garden maintenance, watering, and allied services, are exempt from Service Tax - The demand of Service Tax relating to horticulture services is set aside on merits and on account of time bar - Service Tax – Short-payment of tax on Manpower Supply Services - Whether the appellant is liable to pay Service Tax on the manpower supply/recruitment services - HELD - The appellant had partly discharged the Service Tax liability during the relevant period, but there remained a short payment of tax. The plea of limitation is not acceptable in respect of this amount, as it emanates from improper calculation of the tax by the appellant, who had been paying the Service Tax in the normal course for rendering this service. However, there is no evidence of deliberate suppression or wilful misstatement with intent to evade payment of tax, and therefore, while the appellant is liable to pay the balance Service Tax along with applicable interest, the imposition of penalty is not warranted. [Read less]

Customs - Classification of scrap/waste - The appellant filed Bills of entry for clearance of scrap of alloy steel, claiming classification under tariff heading 7204 2990 of the Customs Tariff Act, 1975 - Customs authorities obtained the opinion of a Chartered Engineer, and seized the goods under the belief that they were mis-declared. The authorities reclassified the goods under heading 7224 9099 as alloy steel bars, imposed a redemption fine, and levied a penalty - Whether the impugned goods should be classified as 'waste and scrap' under the relevant section and chapter notes of the Customs Tariff Act, or as 'alloy stee... [Read more]

Customs - Classification of scrap/waste - The appellant filed Bills of entry for clearance of scrap of alloy steel, claiming classification under tariff heading 7204 2990 of the Customs Tariff Act, 1975 - Customs authorities obtained the opinion of a Chartered Engineer, and seized the goods under the belief that they were mis-declared. The authorities reclassified the goods under heading 7224 9099 as alloy steel bars, imposed a redemption fine, and levied a penalty - Whether the impugned goods should be classified as 'waste and scrap' under the relevant section and chapter notes of the Customs Tariff Act, or as 'alloy steel bars' under heading 7224 9099 - HELD - The authorities had grossly ignored the relevant section and chapter notes defining 'waste and scrap' under the Customs Tariff Act. The Chartered Engineer's report clearly stated that the impugned goods were off-specification and unsuitable for the intended use, and could only be used for melting purposes. The authorities had failed to provide any reliable evidence to establish that the goods were 'alloy steel bars' and not 'waste and scrap'. The goods should be classified as 'waste and scrap' under the relevant provisions of the Customs Tariff Act – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Refund of Unutilized CENVAT Credit on export of services - Appellant availed CENVAT credit on various input services and filed refund claims for the unutilized credit under Rule 5 of the CCR, 2004 - Department partially allowed and partially rejected the refund claims, and the appellant filed an appeal against the rejection - Whether the appellant is entitled to the refund of the CENVAT credit that was rejected by the authorities on the grounds of lack of nexus between the input services and the output services, and other procedural deficiencies in the input service invoices – HELD - The input services for ... [Read more]

Service Tax - Refund of Unutilized CENVAT Credit on export of services - Appellant availed CENVAT credit on various input services and filed refund claims for the unutilized credit under Rule 5 of the CCR, 2004 - Department partially allowed and partially rejected the refund claims, and the appellant filed an appeal against the rejection - Whether the appellant is entitled to the refund of the CENVAT credit that was rejected by the authorities on the grounds of lack of nexus between the input services and the output services, and other procedural deficiencies in the input service invoices – HELD - The input services for which the refund was denied have been consistently held to be 'input services' by various judicial precedents. The CBEC Circular No. 120/01/2010-ST also clarified that there cannot be two different yardsticks for determining the eligibility of CENVAT credit and the eligibility of refund – Further, if the CENVAT credit was not objected to at the time of availment, the same cannot be challenged during the refund processing stage. Additionally, the procedural deficiencies in the input service invoices, such as the absence of the service tax registration number or PAN-based service tax registration number, should not result in the denial of the substantive benefit of the refund, as the receipt and use of the input services for the export of output services is not disputed. Accordingly, the impugned order is set aside and the Department is directed to grant the refund of the CENVAT credit - The appeal of the appellant is allowed [Read less]

Service Tax - Reliance on Income Tax Returns/Form 26AS for Service Tax Demand – Dept issued SCN demanding service tax based on the value shown in ST-3 Returns vis-à-vis the summary of Form 26AS as per Income Tax Returns - Appellant contended that they have been providing 'Works Contract Service' for which they are eligible for abatement, and being a proprietorship firm, 50% of the tax liability, if any, is required to be paid by the recipient of the service on RCM basis - Whether the demand of service tax can be confirmed solely based on the data received from the Income Tax Department, without adducing any corroborativ... [Read more]

Service Tax - Reliance on Income Tax Returns/Form 26AS for Service Tax Demand – Dept issued SCN demanding service tax based on the value shown in ST-3 Returns vis-à-vis the summary of Form 26AS as per Income Tax Returns - Appellant contended that they have been providing 'Works Contract Service' for which they are eligible for abatement, and being a proprietorship firm, 50% of the tax liability, if any, is required to be paid by the recipient of the service on RCM basis - Whether the demand of service tax can be confirmed solely based on the data received from the Income Tax Department, without adducing any corroborative evidence to demonstrate the rendition of taxable service – HELD - The demand of service tax cannot be confirmed solely based on the data received from the Income Tax Department, such as the figures reflected in the Income Tax Returns or Form 26AS, without any independent or corroborative evidence to demonstrate the rendition of taxable service - Mere entries in the Income Tax Returns or Form 26AS cannot, by themselves, establish liability under the Finance Act, 1994, unless corroborated by evidence demonstrating the rendition of taxable service. The Service Tax and Income Tax are governed by separate and independent statutes, and the provisions of one cannot be mechanically applied to the other – Further, for the purpose of levying service tax, it is essential to clearly identify the service provider, service recipient, and the consideration paid for the service. In the absence of such evidence, the demand of service tax cannot be sustained merely on the basis of data from other statutory records, such as Income Tax Returns or balance sheets – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Exemption from Service Tax to construction of various projects for the Government and local authorities - Refund claim of service tax paid on construction of various projects for the government and local authorities during the period from 01.04.2015 to 29.02.2016. The refund claim was filed under Section 102 of the Finance Act, 1994, which provided for retrospective exemption from service tax for the said period on construction services provided to the government, local authorities or governmental authorities - Whether the appellant was eligible for the exemption benefit under Entry 12A of Notification No. 25... [Read more]

Service Tax - Exemption from Service Tax to construction of various projects for the Government and local authorities - Refund claim of service tax paid on construction of various projects for the government and local authorities during the period from 01.04.2015 to 29.02.2016. The refund claim was filed under Section 102 of the Finance Act, 1994, which provided for retrospective exemption from service tax for the said period on construction services provided to the government, local authorities or governmental authorities - Whether the appellant was eligible for the exemption benefit under Entry 12A of Notification No. 25/2012-ST dated 20.06.2012 - HELD - There is difference between service rendered for business or commerce and the Government activities rendered for public welfare - An activity is said to be commercial in nature, if it is carried on as a business to earn profit. Profit motive is essential in determining the transaction for commerce or industry. Whether the activity actually results in profit or loss is immaterial but what is necessary is that the intention must be to earn profit. Similarly, an organization or establishment can be said to be 'commercial concern' if it is run with an intention to make money or earn profit - The construction of parking lots and an educational institute by the appellant were not for commercial or business purposes, but were undertaken to fulfill the Constitutional and statutory duties of the Government and local authorities under Article 243W of the Constitution. The nominal fees charged for use of the parking facilities were not with the intent of earning profit, but for maintaining and managing the public facilities. Therefore, the appellant was eligible for the exemption under Entry 12A of Notification No. 25/2012-ST - The order under challenge is set aside and the appeal is allowed - Whether the appellant's claim of refund on construction of parking facilities for the local authority was rightly rejected - HELD - The contracts for construction of the parking facilities were entered into prior to 01.03.2015, as required under Section 102 of the Finance Act, 1994. The Department failed to provide any evidence to show that the contracts required payment of stamp duty prior to 01.03.2015 - The CBEC vide Circular No. 334/8/2016 dated 29.02.2016 has clarified that the relevant services provided to the Government during the period under the contracts entered into prior 01.03.2015 shall remain exempted from service tax. Section 102(2) has used word ‘shall” making it mandatory for the department to refund such service tax which has been collected but which would not have been so collected as the exemption would never been withdrawn - The appellant had also submitted a Chartered Accountant's certificate to show that the incidence of tax was not passed on to the recipients. Therefore, the rejection of the refund claim is unjustified, and the order under challenge is set aside. [Read less]

Customs – Demand of Differential IGST, Effect of clarificatory Circular - Appellant imported "Poultry Keeping Machinery" and "parts /equipments of Poultry Keeping Machinery" during the period September 2017 to December 2021 and classified them under CTSH 84362900 & CTSH 84369100, clearing them upon payment of 12% IGST. However, during post-clearance audit, it was observed that the appellant had paid a lower rate of IGST @ 12% under Serial NO. 199 of Schedule II of the IGST Notification No. 1/2017-IGST (Rate) dated 28.06.2017 instead of clearing the parts under Serial No. 453 of Schedule III of the said Notification, whic... [Read more]

Customs – Demand of Differential IGST, Effect of clarificatory Circular - Appellant imported "Poultry Keeping Machinery" and "parts /equipments of Poultry Keeping Machinery" during the period September 2017 to December 2021 and classified them under CTSH 84362900 & CTSH 84369100, clearing them upon payment of 12% IGST. However, during post-clearance audit, it was observed that the appellant had paid a lower rate of IGST @ 12% under Serial NO. 199 of Schedule II of the IGST Notification No. 1/2017-IGST (Rate) dated 28.06.2017 instead of clearing the parts under Serial No. 453 of Schedule III of the said Notification, which attracts IGST @ 18% - Demand of differential IGST with applicable interest and imposition of redemption fine along with penalties – HELD - By the time the show cause notice was issued, the rate of GST applicable on parts of poultry machinery remained undecided. However, the subsequent developments, including the recommendations of the GST Council and the clarificatory Circular issued on 15.07.2024, which clarified that tariff item No. 84369100 would attract GST @ 12% under Serial No. 199 of the Notification dated 28.06.2017, were not considered by the Commissioner. The beneficial Circulars should be treated as binding on the Departmental officers and should have retrospective application. Further, on the basis of recommendations of GST Council, the issue for the past periods were regularized on “as is where is basis” - The appellant had duly discharged CGST on the parts of Poultry keeping machinery at 12% during the relevant period - The order passed by the Commissioner was unsustainable both in law and facts - The order of the Commissioner is set aside and the appeal is allowed [Read less]

GST – West Bengal AAR – Applicable GST Rates on Tobacco Leaves - Applicant seeking Advance Ruling on the applicable GST rates on various activities relating to the sale of tobacco leaves - Applicable rate of GST on tobacco leaves sold to other traders by the applicant as they are purchased from farmers after sun curing in the fields, without undertaking any processing except the storage or stocking of the leaves – HELD – The tobacco leaves do not lose their character of leaves as such even after undergoing the process of curing. It is during and after the process of stemming or stripping the tobacco leaf loses its ... [Read more]

GST – West Bengal AAR – Applicable GST Rates on Tobacco Leaves - Applicant seeking Advance Ruling on the applicable GST rates on various activities relating to the sale of tobacco leaves - Applicable rate of GST on tobacco leaves sold to other traders by the applicant as they are purchased from farmers after sun curing in the fields, without undertaking any processing except the storage or stocking of the leaves – HELD – The tobacco leaves do not lose their character of leaves as such even after undergoing the process of curing. It is during and after the process of stemming or stripping the tobacco leaf loses its character of leaf as such - The tobacco leaves purchased from farmers after sun curing in the fields, without any further processing except storage or stocking, are covered under Tariff item no. 240110 and Entry no. 162 of Schedule I of the GST Rate Notification. Accordingly, the supply of such tobacco leaves would be taxed at 5% GST – Ordered accordingly - Issue 2: Applicable rate of GST if the applicant segregates the tobacco into grades depending on their size (width), colour/shade, length, texture of the leaf etc. and sells such graded tobacco leaf – HELD - Even after being graded based on various physical parameters, the tobacco leaves remain as "tobacco leaves as such" and are covered under Tariff item no. 240110 and Entry no. 162 of Schedule I. Accordingly, the supply of such graded tobacco leaves would also be taxed at 5% GST - Issue 3: What will be the applicable rate of GST if the tobacco leaves are sold to other traders after removing the butts to avoid damage to leaves during transportation – HELD - The removal of the tough, stem-like edge or butt of the tobacco leaf, leaving only the pliable lamina, does not cause the tobacco leaf to lose its character as a "tobacco leaf". Therefore, such tobacco leaves, after butting, are also covered under Tariff item no. 240110 and Entry no. 162 of Schedule I, and would be taxed at 5% GST. [Read less]

GST – West Bengal AAR - Taxability of amounts received by applicant pursuant to Arbitration Award, additional consideration on account of upward revision of price – Applicant entered into three agreements with THDC India Ltd for execution of work for the construction of Hydro Power Plants. Disputes arose during the execution of the work, and the matter was referred to Arbitration. The Arbitral Tribunal passed awards in favor of the applicant, allowing claims for extra expenditure, differential cost of cement, reimbursement of expenses, and refund of excess deductions. The applicant received the payment pursuant to Conc... [Read more]

GST – West Bengal AAR - Taxability of amounts received by applicant pursuant to Arbitration Award, additional consideration on account of upward revision of price – Applicant entered into three agreements with THDC India Ltd for execution of work for the construction of Hydro Power Plants. Disputes arose during the execution of the work, and the matter was referred to Arbitration. The Arbitral Tribunal passed awards in favor of the applicant, allowing claims for extra expenditure, differential cost of cement, reimbursement of expenses, and refund of excess deductions. The applicant received the payment pursuant to Conciliation Proceedings and a Settlement Agreement in 2024 - Whether the claims allowed by the Arbitral Tribunal vide the Arbitration Awards constitute "liquidated damages" under GST or or whether they should be treated as additional consideration for the supply already made – HELD – The amounts awarded by the Arbitration Tribunal under different heads for the three packages can be categorised broadly under twelve heads - The claims allowed for extra expenditure due to change in the methodology, payment of price adjustment on extra items, deduction or deletion from final bill, extra expenditure for excavation of compressors and receiver's room, payment of cost of materials for pre-stressed anchor work, and extra expenditure for backfilling behind walls of TRT outlet, as well as the claims allowed as refund of rebate wrongfully recovered or deducted, are to be considered as "supply" under GST. On the other hand, the claims allowed for extra expenditure incurred in purchasing materials, operating private quarries, cost difference for use of higher grade cement, and reimbursement of expenditure for shifting of infrastructure facility are considered as "liquidated damages" and not taxable under GST – Ordered accordingly - Issue 3: Whether GST would be applicable for the cost of arbitration allowed vide Arbitration Award and received vide the Settlement Agreement – HELD - The arbitration as service has been provided by the Arbitration Tribunal to the applicant - Arbitration service will fall under Legal and Accounting services under heading no. 9982 and group no. 99821. The specific service is covered by service code no. 998215 - the cost of arbitration is taxable under reverse charge mechanism, as the applicant is the recipient of the arbitration services provided by the Arbitral Tribunal. The applicable GST rate would be 18% - The place of supply of such service is guided by Clause (a) of Section 12(2) of the IGST Act, 2017. Hence, the place of supply of arbitration service will be the location of the applicant i.e. West Bengal [Read less]

Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019 - Eligibility for Tax Waiver under Settlement Act – Petitioner filed applications under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019 (Settlement Act) seeking waiver of tax dues - The Designated Authority initially allowed the petitioner's applications, but the orders were later challenged by the authorities, contending that the petitioner was not eligible for the full waiver as it had not paid the undisputed tax amounts - The Appellate Authority passed the impugned order holding that the petitioner i... [Read more]

Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019 - Eligibility for Tax Waiver under Settlement Act – Petitioner filed applications under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019 (Settlement Act) seeking waiver of tax dues - The Designated Authority initially allowed the petitioner's applications, but the orders were later challenged by the authorities, contending that the petitioner was not eligible for the full waiver as it had not paid the undisputed tax amounts - The Appellate Authority passed the impugned order holding that the petitioner is not entitled for the waiver - Whether the petitioner was eligible for the full waiver of tax dues under the Settlement Act – HELD - Under Section 10 of the Act, for the undisputed tax amounts, the applicant was required to pay 100% of the amount, and only the disputed tax amounts were eligible for 50% waiver. The petitioner did not provide evidence that the amounts it had paid were disputed tax. The authorities had rightly determined the undisputed tax amounts payable by the petitioner based on the records. The orders passed by the authorities, denying the petitioner's claim for full waiver, is legal and justified – Further, the review application filed by the petitioner under Section 17 of the Settlement Act was beyond the prescribed time limit of 12 months from the date of the original order, and hence, the authorities were correct in rejecting the review application - The orders denying the full tax waiver claimed under the Settlement Act is upheld and the petition is dismissed [Read less]

Central Excise - Payment of Excise Duty through Cenvat Credit, Levy of Penalty for delay in payment of duty - Whether the appellant can pay the duty by utilizing the Cenvat credit during the default period as per Rule 8(3A) of the Central Excise Rules, 2002 – HELD - The Gujarat High Court in Indsur Global Ltd. case had declared the portion of Rule 8(3A) requiring payment of duty without utilizing Cenvat credit as unconstitutional. This decision has attained finality after the dismissal of the Department's appeal by the Supreme Court. Therefore, the appellant is entitled to pay the duty by utilizing Cenvat credit during t... [Read more]

Central Excise - Payment of Excise Duty through Cenvat Credit, Levy of Penalty for delay in payment of duty - Whether the appellant can pay the duty by utilizing the Cenvat credit during the default period as per Rule 8(3A) of the Central Excise Rules, 2002 – HELD - The Gujarat High Court in Indsur Global Ltd. case had declared the portion of Rule 8(3A) requiring payment of duty without utilizing Cenvat credit as unconstitutional. This decision has attained finality after the dismissal of the Department's appeal by the Supreme Court. Therefore, the appellant is entitled to pay the duty by utilizing Cenvat credit during the default period - The penalty under Rule 25/Section 11AC is not imposable as the goods were removed on invoices, and there was no intention to evade payment of duty. However, the appellant has contravened the provisions of Rule 8 of the Central Excise Rules, for which the Tribunal imposed a penalty of Rs. 5,000/- under Rule 27 of the Central Excise Rules, 2002. The mentioning of a wrong provision or non-mentioning of a provision does not vitiate the proceedings if the adjudicating authority has the requisite jurisdiction - The appeal is partially allowed [Read less]

GST - Difference between GSTR-1 and GSTR-3B; Certificate of Chartered Accountant without UDIN – Imposition of penalty for difference in GSTR-1 and 3B recorded in GSTR-9C. The Appellate Authority had also drawn an adverse presumption against the petitioner for not producing a certificate of Chartered Accountant with UDIN, GSTR-9, and GSTR-9C – HELD - The petitioner had submitted that the difference in GSTR-1 and GSTR-3B was due to a mistake in filing the GSTR-1 for March (FY 2017-18), which was corrected in the GSTR-3B and the annual return GSTR-9. The petitioner should be given an opportunity to justify the difference ... [Read more]

GST - Difference between GSTR-1 and GSTR-3B; Certificate of Chartered Accountant without UDIN – Imposition of penalty for difference in GSTR-1 and 3B recorded in GSTR-9C. The Appellate Authority had also drawn an adverse presumption against the petitioner for not producing a certificate of Chartered Accountant with UDIN, GSTR-9, and GSTR-9C – HELD - The petitioner had submitted that the difference in GSTR-1 and GSTR-3B was due to a mistake in filing the GSTR-1 for March (FY 2017-18), which was corrected in the GSTR-3B and the annual return GSTR-9. The petitioner should be given an opportunity to justify the difference and provide relevant documents to the Appellate Authority - The petitioner had initially submitted a certificate of the Chartered Accountant, but it did not have the UDIN. The petitioner has now obtained a fresh certificate with UDIN and submitted it. Since the Appellate Authority had not considered the certificate due to the absence of UDIN, the matter should be remanded to the Appellate Authority to reconsider the petitioner's case in light of the new certificate - The petitioner is granted liberty to approach the Appellate Authority with the relevant documents, including the Chartered Accountant's certificate with UDIN – The petition is disposed of [Read less]

Customs - Petition for Quashing Confiscation – Import of boiled betel nuts from Indonesia. Customs authorities reclassified the goods as areca nuts under CTH 0802 80 10, finding them to be prohibited imports under the Minimum Import Price (MIP) condition, and ordered absolute confiscation without granting the statutory option of redemption under Section 125 of the Customs Act, 1962 - Whether the petitioner was entitled to the statutory option of redemption under Section 125 of the Customs Act, 1962, despite the goods being classified as prohibited areca nuts – HELD - The Section 125(1) of the Customs Act employs the ex... [Read more]

Customs - Petition for Quashing Confiscation – Import of boiled betel nuts from Indonesia. Customs authorities reclassified the goods as areca nuts under CTH 0802 80 10, finding them to be prohibited imports under the Minimum Import Price (MIP) condition, and ordered absolute confiscation without granting the statutory option of redemption under Section 125 of the Customs Act, 1962 - Whether the petitioner was entitled to the statutory option of redemption under Section 125 of the Customs Act, 1962, despite the goods being classified as prohibited areca nuts – HELD - The Section 125(1) of the Customs Act employs the expression "may", thereby conferring discretion upon the adjudicating authority to grant or deny redemption, particularly in cases involving prohibited goods. The adjudicating authority had recorded detailed reasons for treating the goods as prohibited on account of MIP/CIF violation and deliberate misclassification, and for denying redemption. No case of perversity, lack of jurisdiction, or violation of natural justice was made out to warrant interference under Article 226. The statutory scheme and judicial precedents emphasize finality in fiscal matters, and Courts cannot, on equitable considerations, dilute statutory mandates or timelines – The writ petition is dismissed - Whether the writ petition was maintainable, considering the petitioner had failed to challenge the Order-in-Original within the statutory period under Section 128 of the Customs Act, 1962 – HELD - The petitioner had failed to challenge the Order-in-Original within the statutory period of 60 days, extendable by a further 30 days, under Section 128 of the Customs Act. The Commissioner of Customs (Appeals) had rightly dismissed the delayed appeal on the ground of limitation. The petitioner's attempt to invoke Article 226 after having lost the statutory remedy by its own inaction could not be countenanced, as the writ jurisdiction cannot be used to bypass statutory remedies, especially where the litigant has disabled itself by delay. The petitioner's conduct is evasive, dilatory, and lacking in bona fides, and there was no timely effort to seek provisional release or other appropriate relief, indicating a calculated strategy to avoid the authorities. [Read less]

GST – Tax Evasion - Pre-arrest bail application in an economic offence involving tax evasion – HELD – The Economic offences are distinct and grave, posing serious threats to the country's economy and financial stability. They are committed with deliberate design and cool calculation, driven by the motive of unlawful personal gain, with complete disregard for societal consequences. The misappropriation of public exchequer and depletion of national resources caused by such acts ultimately undermine the welfare of society at large. Considering the gravity and seriousness of the offence, the role of the accused, and the ... [Read more]

GST – Tax Evasion - Pre-arrest bail application in an economic offence involving tax evasion – HELD – The Economic offences are distinct and grave, posing serious threats to the country's economy and financial stability. They are committed with deliberate design and cool calculation, driven by the motive of unlawful personal gain, with complete disregard for societal consequences. The misappropriation of public exchequer and depletion of national resources caused by such acts ultimately undermine the welfare of society at large. Considering the gravity and seriousness of the offence, the role of the accused, and the impact on public interest, the Court is not inclined to grant anticipatory bail to petitioner, especially when the investigation is still underway – The petition is dismissed - Whether the pre-arrest bail application of co-accused – HELD - The pre-arrest bail application of Dhyata Jain is partially allowed. The investigation revealed that Dhyata Jain's role was confined to providing field-level assistance under the instructions of his father, who was the prime accused. Considering the limited role of Dhyata Jain, the Court directed that in the event of his arrest, he shall be released on bail upon furnishing a personal bond and sureties, subject to certain conditions. [Read less]

Service Tax - Discharge of Service Tax liability by sister unit – Appellant has two units located in Vapi and Mumbai. The dispute was that the service tax was discharged at the Mumbai unit, whereas as per the law, it should have been discharged at the Vapi unit - Whether the appellant can be held liable to pay the service tax again when it has already been paid by the same legal entity at a different location – HELD - Merely because the service tax was paid under a different registration number by the same company, it cannot be considered as non-payment of service tax. The law does not permit the taxation authority to ... [Read more]

Service Tax - Discharge of Service Tax liability by sister unit – Appellant has two units located in Vapi and Mumbai. The dispute was that the service tax was discharged at the Mumbai unit, whereas as per the law, it should have been discharged at the Vapi unit - Whether the appellant can be held liable to pay the service tax again when it has already been paid by the same legal entity at a different location – HELD - Merely because the service tax was paid under a different registration number by the same company, it cannot be considered as non-payment of service tax. The law does not permit the taxation authority to recover the tax again where the tax on the same taxable event has already been paid, albeit under a different head or accounting code. The service tax paid by the headquarters or by appellant’s another unit can be adjusted by the authorities against the service tax liability, if any, of the appellant company at Vapi – Further, the extended period of limitation under Section 73(1) of the Finance Act, 1994 is not invocable in this case as there was no suppression of facts or intention to evade payment of service tax - Accordingly, the demand of service tax, interest and penalties are set aside and the appeal is allowed [Read less]

Customs - Confiscation, Redemption Fine, Re-export – Petitioner imported consignment of Mixed Glycol. However, the Customs authorities found that the goods were actually kerosene and not Mixed Glycol - Authorities confiscated the goods under Sections 111(d) and 111(f) of the Customs Act, 1962 - Petitioner paid the penalty and redemption fine, but not within the 120-day period prescribed under Section 125(3) of the Act - Whether the respondents are required to allow the re-export of the goods despite the petitioner's failure to pay the redemption fine within the 120-day period prescribed under Section 125(3) of the Custom... [Read more]

Customs - Confiscation, Redemption Fine, Re-export – Petitioner imported consignment of Mixed Glycol. However, the Customs authorities found that the goods were actually kerosene and not Mixed Glycol - Authorities confiscated the goods under Sections 111(d) and 111(f) of the Customs Act, 1962 - Petitioner paid the penalty and redemption fine, but not within the 120-day period prescribed under Section 125(3) of the Act - Whether the respondents are required to allow the re-export of the goods despite the petitioner's failure to pay the redemption fine within the 120-day period prescribed under Section 125(3) of the Customs Act, 1962 – HELD - The Respondents are not required to allow the re-export of the goods. The Section 125(3) of the Act clearly provides that if the fine imposed under Section 125(1) is not paid within 120 days from the date of the option given, such option becomes void, unless an appeal against the order is pending - In the present case, the petitioner did not file an appeal against the order of the Adjudicating Authority and paid the redemption fine after a delay of almost one year, which is beyond the 120-day period prescribed under the law. The petitioner cannot claim the right to re-export the goods as the option granted by the Adjudicating Authority became void due to the delay in payment of the redemption fine. The ignorance of the law cannot be an excuse, especially when the petitioner was involved in the proceedings before the Adjudicating Authority and the High Court - The petition is dismissed [Read less]

GST - Termination of License Agreement for Non-Payment of License Fee and GST - Petitioner was granted a license by the Moradabad Development Authority (MDA) for the operation, maintenance, and event management of Eco Herbal Park pursuant to a License Agreement - Petitioner alleged that the agreement did not clearly specify the inclusion or method of calculation of GST and that delay in payment occurred due to confusion regarding GST liability - Whether the termination of the License Agreement by the MDA is valid and justified – HELD - The License Agreement was a binding contractual document governed by its own express t... [Read more]

GST - Termination of License Agreement for Non-Payment of License Fee and GST - Petitioner was granted a license by the Moradabad Development Authority (MDA) for the operation, maintenance, and event management of Eco Herbal Park pursuant to a License Agreement - Petitioner alleged that the agreement did not clearly specify the inclusion or method of calculation of GST and that delay in payment occurred due to confusion regarding GST liability - Whether the termination of the License Agreement by the MDA is valid and justified – HELD - The License Agreement was a binding contractual document governed by its own express terms and conditions. The petitioner had admittedly failed to comply with the payment schedule stipulated in the agreement, resulting in substantial arrears. The obligations under the agreement, including timely payment of license fee, GST, and interest on delayed payments, were clear and unambiguous. The petitioner's plea regarding confusion over GST liability was unsubstantiated, as GST is a statutory levy applicable as per law, and the agreement did not exclude its applicability - Furthermore, the agreement itself contained a clause for dispute resolution before the Civil Court. In such circumstances, the Court is not inclined to exercise its extraordinary writ jurisdiction under Article 226 of the Constitution to interfere with the contractual arrangement between the parties or to substitute the remedy available under the contract - The writ petition was accordingly disposed of, with the liberty granted to the petitioner to avail the alternative remedy as enshrined in the agreement itself, if so advised – Ordered accordingly [Read less]

GST - Cancellation of registration on ground not mentioned in show cause notice - Petitioner argued that the show cause notice was issued on the ground of the registration being obtained by fraud, willful misstatement, or suppression of facts, but the order cancelling the registration was passed on the ground of the petitioner being involved in circular trading and not paying any cash tax - Whether the cancellation of the petitioner's GST registration on a ground not mentioned in the SCN is valid – HELD - It is a settled position that a show cause notice is the foundation of further proceedings. An opportunity has to be ... [Read more]

GST - Cancellation of registration on ground not mentioned in show cause notice - Petitioner argued that the show cause notice was issued on the ground of the registration being obtained by fraud, willful misstatement, or suppression of facts, but the order cancelling the registration was passed on the ground of the petitioner being involved in circular trading and not paying any cash tax - Whether the cancellation of the petitioner's GST registration on a ground not mentioned in the SCN is valid – HELD - It is a settled position that a show cause notice is the foundation of further proceedings. An opportunity has to be afforded to the noticee to answer and show cause notice but in case a particular issue has not even been mentioned in the show cause notice, the assessee/noticee has no occasion to respond - In the present case, the order of cancellation was passed on a ground that was not even mentioned in the show cause notice, and the petitioner had no occasion to respond to it - The passing an order on a premise not put to the assessee in the show cause notice is clearly unjustified and unsustainable. The impugned orders are set aside with liberty to the respondent-department to initiate a fresh process by issuing a detailed show cause notice, allowing the petitioner to file its reply, and then passing appropriate speaking orders – The writ petition is allowed [Read less]

Service Tax - Scope of Section 35G of the Central Excise Act, 1944 – Demand of service tax on the 'Clearing and Forwarding' services provided by the appellant to Tata Iron and Steel Company (TISCO) and Tata Ryerson Limited (TRL) for the period September 1999 to March 2004 - Appellant argued that it did not provide the services of a ‘Clearing and Forwarding agent service to the said companies - Whether the appellant provided Clearing and Forwarding services to TISCO and TRL – HELD - The appellant undertook to receive and unload the materials of TISCO and TRL, transport the materials, arrange for the storage of the mat... [Read more]

Service Tax - Scope of Section 35G of the Central Excise Act, 1944 – Demand of service tax on the 'Clearing and Forwarding' services provided by the appellant to Tata Iron and Steel Company (TISCO) and Tata Ryerson Limited (TRL) for the period September 1999 to March 2004 - Appellant argued that it did not provide the services of a ‘Clearing and Forwarding agent service to the said companies - Whether the appellant provided Clearing and Forwarding services to TISCO and TRL – HELD - The appellant undertook to receive and unload the materials of TISCO and TRL, transport the materials, arrange for the storage of the materials, and forward the materials to the customers of the said two companies. The appellant also assisted the personnel of TISCO in conducting stock verification of the goods lying in the godown and undertook the work of cutting and bending steel products of TISCO - The appellant is clearly guilty of approbation and reprobation. The appellant voluntarily registered itself under the Central Excise Act, which indicates that the appellant admitted that the remuneration received from TISCO and TRL was amenable to service tax under the Central Excise Act. The purpose of the registration would be rendered meaningless if it did not include the period of services provided by the appellant from September 1999 onwards. The appellant also made payments towards past service tax dues, which established the jural relationship between the appellant and the revenue authority with regard to 'Clearing and Forwarding' services provided by the appellant to the said two companies. The appellant fulfilled all the criteria of a Clearing and Forwarding agent as enumerated in the decision in Coal Handlers (P) Ltd. v. CCE - The appellant provided Clearing and Forwarding services to TISCO and TRL – The revenue authority shall raise a fresh demand of service tax for the clearing and forwarding services upon the appellant. There shall be a simple interest of 10% per annum on the consolidated amount of the service tax to be paid by the appellant under the tax bracket of 'Clearing and Forwarding services' – The appeal is disposed of - Whether the High Court has the jurisdiction to entertain the appeal under Section 35G of the Central Excise Act, 1944 - HELD - The scope of Section 35G excludes appeals where the rate of excise duty or the value of goods to be taxed is at issue. In the present case, the Court is not concerned with the rate of service tax or the value of the services provided by the appellant. The issues involved will not have a pan-India effect, and the Court is called upon to decide the questions of law arising from the admitted facts on the record. The key lies in the words "for purposes of assessment" in Section 35G, and the phrase "relation to" must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment. Since the present case does not involve such a situation, the High Court has the jurisdiction to entertain the appeal under Section 35G – Ordered accordingly - Whether the claim of service tax is barred by limitation under Section 73 of the Finance Act, 1994 - The show cause notice for the claim of service tax was issued on September 13, 2004, for the period starting from September 1999. The appellant argued that the claim is barred by limitation under Section 73 of the Finance Act, 1994 - HELD - The cause of action for the show-cause notice dated September 13, 2004, stood revived on January 29, 2004, when the appellant made payments towards the past service tax dues. Applying the principle of acknowledgment of debt under Section 18 of the Limitation Act, 1936, the said payments renewed the cause of action - The appellant is covered by the provisions of Section 73(4A) of the Finance Act, 1994, which was applicable at the time of the payment made by the appellant. Under Section 73(4A), the revenue authority had five years from the relevant date, which was the date of the payment made by the appellant, to raise the claim of service tax. The appellant had consciously omitted to file its returns under Section 70, and the revenue authority did not have any information from the appellant regarding its business transactions with TISCO and TRL from September 1999 to April 2002, when the search and seizure operation was conducted. Therefore, the limitation period of five years applies to the claim of service tax against the appellant - Whether the imposition of penalty on the appellant is justified - HELD - The appellant shall pay a penalty at the rate of 15% of the service tax amount. The appellant had voluntarily registered itself under the Central Excise Act after the search and seizure operation conducted by the revenue authority, which persuaded the Court to lean in favor of a reduction of the penalty. However, the deliberate omission of the appellant to pay the service tax from the period September 1999, warranted the imposition of a penalty. The Court directed the revenue authority to raise a fresh demand for the service tax, interest, and the penalty within seven days from the date of the pronouncement of the judgment. [Read less]

GST - Rectification of Assessment Order – Challenge to order passed under Section 161 of the CGST Act, 2017 rejecting the application for rectification of the order passed under Section 73 of the GST Act. The petitioner had contended that it had already submitted the reconciliation statement and details of credit notes issued by suppliers, which were available on the GST portal, but the authority had rejected the application without considering these documents and without affording an opportunity of hearing - HELD - The order rejecting the application for rectification is not valid as it did not contain any reasons for n... [Read more]

GST - Rectification of Assessment Order – Challenge to order passed under Section 161 of the CGST Act, 2017 rejecting the application for rectification of the order passed under Section 73 of the GST Act. The petitioner had contended that it had already submitted the reconciliation statement and details of credit notes issued by suppliers, which were available on the GST portal, but the authority had rejected the application without considering these documents and without affording an opportunity of hearing - HELD - The order rejecting the application for rectification is not valid as it did not contain any reasons for not accepting the documents submitted by the petitioner and for declining to verify the evidence available on the portal – The petitioner had submitted a detailed reply alongwith the ITC reconciliation statement and credit note reversal statement, which were available in the assessment records. However, the Asst. Commissioner had rejected the application for rectification without considering these documents and without providing an opportunity of hearing to the petitioner – Further, the authorities have not afforded an adequate opportunity to the petitioner to present its case and explain the facts and figures with supporting documents during the proceedings under Section 73 - The order rejecting the rectification application is set aside and the matter is remanded back with the direction to dispose of the application for rectification after considering the documents and records submitted by the petitioner and providing an opportunity of hearing - The writ petition is disposed of [Read less]

GST - Limitation Period for Appeals against cancellation order - Petitioner filed an appeal against the cancellation order after a delay of around 6 months – The Appellate Authority rejected the appeal of the petitioner on the ground of delay - Whether the High Court can condone the delay in filing the appeal and entertain the petition – HELD - Section 107 (4) of the CGST Act grants discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by “sufficient cause” from presenting the appeal after 90 days, but within a period of 30 days. Thus, the ... [Read more]

GST - Limitation Period for Appeals against cancellation order - Petitioner filed an appeal against the cancellation order after a delay of around 6 months – The Appellate Authority rejected the appeal of the petitioner on the ground of delay - Whether the High Court can condone the delay in filing the appeal and entertain the petition – HELD - Section 107 (4) of the CGST Act grants discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by “sufficient cause” from presenting the appeal after 90 days, but within a period of 30 days. Thus, the discretion of the Appellate authority ends on the completion of additional 30 days. Such discretion does not extend to powers under Article 226 of the Constitution on India as well as it would be inconsistent with the legislative intent behind the statutory limitation period. The reasons provided by the petitioner, such as lack of access to login credentials, are not sufficient to condone the delay - The tax payers are supposed to remain vigilant of all the proceedings and have to timely verify the orders on the portal. The taxing statutes operate in very strict time frame, and any relaxation or easing of limitation period will have cascading effect on the functioning of the revenue – The petition is dismissed [Read less]

Central Excise - Limitation period for rebate claim under Central Excise Rules - The petitioner had manufactured and exported galvanized transmission tower and parts of prefabricated steel structure. The goods were exported between October 2007 and December 2007 under 32 ARE-1 applications by paying duty. The rebate claim was made on 05.02.2009, which was rejected by the authorities - Whether the limitation period prescribed under Section 11B of the Central Excise Act, 1944 is applicable to the rebate claim filed by the petitioner under Rule 18 of the Central Excise Rules, 2002 - HELD - The Supreme Court in Sansera Enginee... [Read more]

Central Excise - Limitation period for rebate claim under Central Excise Rules - The petitioner had manufactured and exported galvanized transmission tower and parts of prefabricated steel structure. The goods were exported between October 2007 and December 2007 under 32 ARE-1 applications by paying duty. The rebate claim was made on 05.02.2009, which was rejected by the authorities - Whether the limitation period prescribed under Section 11B of the Central Excise Act, 1944 is applicable to the rebate claim filed by the petitioner under Rule 18 of the Central Excise Rules, 2002 - HELD - The Supreme Court in Sansera Engineering Ltd. v. Deputy Commissioner LTU Bengaluru had categorically held that the limitation period prescribed under Section 11B of the CEA, 1944 is applicable to a claim for rebate under Rule 18 of the Central Excise Rules, 2002. The judgment in Mafatlal Industries Ltd. v. Union of India, which dealt with the issue of refund of excess duty collected during provisional assessment, did not address the specific question of applicability of limitation period to rebate claims under Rule 18. Therefore, the Supreme Court's judgment in Sansera case, which answered this specific question, is binding. Accordingly, the petitioner's rebate claim was made beyond the limitation period of one year from the relevant date, i.e., the date on which the goods left India, and hence, the rejection of the claim by the authorities was correct - The writ petition filed by the petitioner is dismissed [Read less]

Central Excise - Valuation of Excisable Goods - Manufacture and supply of lubricants and engine oils. Commissioner passed orders fastening differential duty liability on the appellants, along with imposition of penalties, on the ground that the appellants had not followed the correct valuation methodology under the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Whether the adjudicating authority was correct in rejecting the transaction value adopted by the appellants and instead resorting to the valuation provisions under Rule 10A of the Central Excise Valuation Rules, 2000 to determine ... [Read more]

Central Excise - Valuation of Excisable Goods - Manufacture and supply of lubricants and engine oils. Commissioner passed orders fastening differential duty liability on the appellants, along with imposition of penalties, on the ground that the appellants had not followed the correct valuation methodology under the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Whether the adjudicating authority was correct in rejecting the transaction value adopted by the appellants and instead resorting to the valuation provisions under Rule 10A of the Central Excise Valuation Rules, 2000 to determine the assessable value – HELD - The valuation scheme under the Central Excise Act, 1944 and the Valuation Rules is only meant to determine the assessable value, and not the taxability itself. The M/s Standard Greases & Specialities Pvt Ltd, being the manufacturer of the excisable goods, is the 'assessee' under the Act and is liable to pay the excise duty – Further, the adjudicating authority had incorrectly relegated M/s Standard Greases & Specialities Pvt Ltd to the status of a 'job worker' and elevated the other appellants as 'principal manufacturers', without any proper findings on the scope and applicability of Rule 10A of the Valuation Rules. The resort to Rule 10A was not justified, as there was no finding that M/s Standard Greases & Specialities Pvt Ltd had not sold the goods manufactured by them to the other appellants - The adjudicating authority had made presumptive findings regarding the supply of 'additives' to M/s Standard Greases & Specialities Pvt Ltd, without properly ascertaining the scope and implications of such 'supply' under the Valuation Rules - In view of the glaring deficiencies in the adjudication, the impugned orders is set aside and the matter is remanded back to the adjudicating authority for fresh adjudication, directing it to determine the various aspects [Read less]

GST - Limitation period for filing appeal - The petitioner filed the appeal against the order for cancellation of registration after a delay of almost one and a half years, which was beyond the prescribed period under the Section 107(4) of the CGST Act, 2017 – Petitioner contention that the impugned orders deserve to be quashed and set aside on the ground on violation of natural justice – HELD - Opportunity to be heard was extended to the appellant in the appeal proceedings, however, the petitioner did not remain present for asserting its case before the appellate authority. Therefore, there is no justification for bel... [Read more]

GST - Limitation period for filing appeal - The petitioner filed the appeal against the order for cancellation of registration after a delay of almost one and a half years, which was beyond the prescribed period under the Section 107(4) of the CGST Act, 2017 – Petitioner contention that the impugned orders deserve to be quashed and set aside on the ground on violation of natural justice – HELD - Opportunity to be heard was extended to the appellant in the appeal proceedings, however, the petitioner did not remain present for asserting its case before the appellate authority. Therefore, there is no justification for belatedly filing the appeal after almost a period of one and half years - The Appellate Authority correctly rejected the appeal as being barred by limitation, as the maximum period for filing the appeal was 120 days, which could be extended by a further period of 30 days only if the Appellate Authority was satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the initial 3-month period - The High Court cannot exercise its jurisdiction under Article 226 of the Constitution to condone the delay beyond the prescribed limitation period, as the statutory remedy of appeal is the exclusive remedy and the High Court cannot disregard the legislative intent and the time frame prescribed under the statute. The High Court is bound by the principle laid down by the Supreme Court that the High Court's powers under Article 226 are not wider than the Supreme Court's plenary powers under Article 142, and the High Court cannot pass orders which can be settled only through the mechanism prescribed by the statute - The order of the Appellate Authority is upheld and the petition is dismissed [Read less]

Customs - Customs Brokers Licensing Regulations, 2018 – Imposition of penalty on Customs Broker on the ground that the imported goods were overvalued and misclassified – Commissioner imposed penalties on the petitioner under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 for alleged failure to fulfill obligations under the CBLR, 2018 - Whether the ingredients of Sections 112(a), 112(b) and 114AA of the Customs Act are established against the petitioner – HELD - The respondent authority categorically found that the petitioner might not have knowledge of the overvaluation, misclassification or misdeclaratio... [Read more]

Customs - Customs Brokers Licensing Regulations, 2018 – Imposition of penalty on Customs Broker on the ground that the imported goods were overvalued and misclassified – Commissioner imposed penalties on the petitioner under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 for alleged failure to fulfill obligations under the CBLR, 2018 - Whether the ingredients of Sections 112(a), 112(b) and 114AA of the Customs Act are established against the petitioner – HELD - The respondent authority categorically found that the petitioner might not have knowledge of the overvaluation, misclassification or misdeclaration and had merely filed the Bills of Entry based on the documents provided by the importer. The act of "not advising the importer" will not attract the ingredients of Section 112(a) as it is a civil obligation directly connecting the importer, and cannot be extended to the Customs Broker unless it is proven that the Broker's advice or act/omission led to the goods being liable for confiscation. The provisions of Section 112(a), 112(b) and 114AA require mens rea, which was not established against the petitioner. Therefore, the imposition of penalties under these provisions is illegal - Before imposing the penalty on the petitioner, the respondent-authority had the option to suspend, revoke the license under the Regulation 14, and 16 of CBLR, 2018, in case the act of the petitioner deserved such action looking to his conduct. However, such steps are not resorted. Thus, the respondent authority by invoking the provisions of 112(a), 112(b) and 114AA of the Customs Act, 1962 has committed a jurisdictional error by misapplying the statutory provisions. The impugned order is ser aside and the writ petition is allowed [Read less]

GST – Tamil Nadu AAR - Fixed establishment, Requirement of Registration – Applicant manufacture precast structures at their premises and transport them to construction sites in other States for assembling into buildings - Whether the applicant is required obtain registration in the other States where they execute works contract using the precast structures, when they do not have a "fixed establishment" in such States – HELD - A "fixed establishment" means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and techn... [Read more]

GST – Tamil Nadu AAR - Fixed establishment, Requirement of Registration – Applicant manufacture precast structures at their premises and transport them to construction sites in other States for assembling into buildings - Whether the applicant is required obtain registration in the other States where they execute works contract using the precast structures, when they do not have a "fixed establishment" in such States – HELD - A "fixed establishment" means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs - Even though the applicant does not have a permanent establishment at the construction site and only 6-7 of their personnel are present there temporarily, the construction site would still qualify as a "fixed establishment" within the meaning of Section 2(50) of the CGST Act, 2017, as there is a sufficient degree of permanence and the applicant utilises human and technical resources at the site. Therefore, the applicant needs to get registered in the State where the construction site is located – Whenever the applicant undertakes assembling of the precast structures at a construction site situated in Tamil Nadu, where the applicant has a principal place of business, they may add such sites as ‘additional places of business’. In case, the construction site is located in another State, they are required to get registered in the State where the construction site is located - Ordered accordingly - Supply of Goods/Services - Whether the transportation of material used for erecting the precast structures at the construction sites in other states would amount to a supply, in the absence of consideration and two different parties involved – HELD - The activity undertaken by the applicant, i.e. supply of goods or services without consideration falls in Schedule I and consequently under the scope of supply as per Section 7 of the CGST Act, 2017. Even though the activity undertaken by the applicant does not involve two different parties, as per clauses 4 and 5 of Section 25 of the CGST Act, the applicant is considered as a distinct person. Thus, even when there is no consideration and in the absence of involvement of two different parties, the transportation of material used in erection of the precast structures in the construction sites in other States amounts to supply. [Read less]

Central Excise - Classification of Mixed Xylene - The appellant, a manufacturer of petroleum products, classified its product "Mixed Xylene" under Tariff Entry 29024400 of the Central Excise Tariff Act, 1985 (CETA, 1985) - Department alleged that the constituents of Xylene contained in the Mixed Xylene was less than 82.72%, and hence it should be classified under Tariff Entry 2707 of CETA, 1985, attracting a higher rate of duty - Correct classification of the Mixed Xylene product – Appellant claimed to be classifiable under Chapter sub-heading 29024400 attracting 12% ad valorem, whereas, the Revenue’s allegation is tha... [Read more]

Central Excise - Classification of Mixed Xylene - The appellant, a manufacturer of petroleum products, classified its product "Mixed Xylene" under Tariff Entry 29024400 of the Central Excise Tariff Act, 1985 (CETA, 1985) - Department alleged that the constituents of Xylene contained in the Mixed Xylene was less than 82.72%, and hence it should be classified under Tariff Entry 2707 of CETA, 1985, attracting a higher rate of duty - Correct classification of the Mixed Xylene product – Appellant claimed to be classifiable under Chapter sub-heading 29024400 attracting 12% ad valorem, whereas, the Revenue’s allegation is that the product in question is classifiable under Tariff 27073000 attracting 14% ad valorem – HELD – In terms of Harmonized System of Nomenclature (HSN) Explanatory Notes to Heading 2902, to fall under Tariff Entry 29024400, Xylene must contain 95% or more by weight of Xylene isomers, with all isomers being taken together. Since the Mixed Xylene manufactured by the appellant contained less than 95% by weight of Xylene isomers, it could not be classified under Tariff Entry 29024400 – Further, Ethylbenzene cannot be considered an isomer of Xylene, as per the HSN Explanatory Notes and the Tribunal's own precedent in Addisons Paints & Chemicals Ltd. case. Therefore, the classification of the Mixed Xylene under Tariff Entry 2707 30 00 of CETA, 1985 is upheld - The demand for the normal period of limitation with interest is confirmed, but the penalty imposed is set aside as the classification issue was a pure question of law and the appellant had a bona fide belief in its classification - The appeal is partly allowed [Read less]

GST – Andhra Pradesh AAAR - Consideration versus Subsidy/Grant - The appellant received grant-in-aid from the Central Council for Research in Ayurvedic Sciences (CCRAS) to undertake Research & Development activities under the Ayurgyan Scheme – Vide the impugned order the AAR held that the R&D activities undertaken by the appellant under a grant-in-aid arrangement are taxable under the CGST Act, 2017 and are not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) - Whether the grant received by the appellant constitutes "consideration" under Section 2(31) of the CGST Act or is a "subsidy" excluded f... [Read more]

GST – Andhra Pradesh AAAR - Consideration versus Subsidy/Grant - The appellant received grant-in-aid from the Central Council for Research in Ayurvedic Sciences (CCRAS) to undertake Research & Development activities under the Ayurgyan Scheme – Vide the impugned order the AAR held that the R&D activities undertaken by the appellant under a grant-in-aid arrangement are taxable under the CGST Act, 2017 and are not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) - Whether the grant received by the appellant constitutes "consideration" under Section 2(31) of the CGST Act or is a "subsidy" excluded from the definition – HELD - The amounts received by the appellant from the Central Council for Research in Ayurvedic Sciences under the AYURGYAN Scheme are consideration within the meaning of Section 2(31) of the CGST Act, 2017, being payments made in respect of identifiable supplies of goods and services undertaken by the appellant pursuant to defined project obligations. The appellant and CCRAS are distinct taxable persons, and the activities carried out by the appellant constitute supplies made in the course or furtherance of business under Section 7 of the CGST Act - The research and development activities undertaken by the appellant are correctly classifiable under Heading 9981, and the manufacture and supply of extracts constitute taxable supplies of goods - The appellant's research and development activities constitute taxable supply under the CGST Act, 2017, and the appellant is not eligible for exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate) or Notification No. 8/2024-CT (Rate) - The appeal is dismissed - Supply Between Distinct Persons - The appellant was appointed as a Sub-Nodal Agency by CCRAS to carry out the research activities. The appellant contended that this was an "intra-departmental" arrangement without a supply between distinct persons. However, the appellant is a separate legal entity from CCRAS with its own registration, accounts, and statutory existence. The fact that the appellant followed government guidelines like PFMS and GFR does not negate its independent legal personality. The activities were undertaken pursuant to approved proposals with defined deliverables, establishing a clear functional nexus akin to a contractual arrangement, satisfying the requirements of "supply" under Section 7 - Exemption under Entry 3 and 3A of Notification No. 12/2017 - The appellant claimed exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate), which exempt services provided to local authorities "in relation to any function entrusted" to them under Articles 243G and 243W. The services were not provided to a Panchayat or Municipality, nor were they directly in relation to the functions entrusted to such local bodies. The appellant's activities were undertaken for and on behalf of the central autonomous body CCRAS, not under any decentralized governance framework. Merely aligning the activities with a subject like "public health" in the Twelfth Schedule is not sufficient to avail the exemption. [Read less]

GST – Tamil Nadu AAR - Supply of services for agreeing to refrain from competition - As part of the sale, the applicant entered into a non-compete agreement with the purchasers wherein it agreed to refrain from competing with the business of purchasers and cannot do business in all the places where the purchasers are operating. The applicant was paid a non-compete fee for this service - Whether the place of supply of the service rendered by the applicant is outside India – HELD - As per Clause 5 (c) of Schedule II of CGST Act, 2017, the activity of agreeing to the obligation to refrain from an act shall be treated as �... [Read more]

GST – Tamil Nadu AAR - Supply of services for agreeing to refrain from competition - As part of the sale, the applicant entered into a non-compete agreement with the purchasers wherein it agreed to refrain from competing with the business of purchasers and cannot do business in all the places where the purchasers are operating. The applicant was paid a non-compete fee for this service - Whether the place of supply of the service rendered by the applicant is outside India – HELD - As per Clause 5 (c) of Schedule II of CGST Act, 2017, the activity of agreeing to the obligation to refrain from an act shall be treated as ‘Supply of Services’. In the instant case, the applicant has agreed to not do business or compete in the places where the purchasers do business i.e., the applicant has agreed to ‘refrain from doing an act’. As such, the activity of the applicant agreeing not to do business amounts to a ‘Supply of Service’. As the activity of the applicant to refrain from performing an act falls under Supply of Service, same is taxable under GST as per Section 9(1) of CGST Act, 2017 - Based on the facts, the place of supply of the service rendered by the applicant to M/s. RFXCEL Corporation, which is located outside India, is outside India as per Section 13(2) of the IGST Act, 2017. On the other hand, the ‘Place of Supply’ of Service in respect of services rendered to M/s. SmartPoint Technologies and M/s. Antares Vision India is within India - Whether the service rendered by the applicant can be deemed to be 'export of services' under in Section 2(6) of the IGST Act, 2017 and therefore be a zero-rated supply – HELD - The service rendered by the applicant to M/s. RFXCEL Corporation, which is located outside India, satisfies all the conditions as per Section 2(6) of IGST Act, 2017 and hence gets covered as “export of services”. As a result, the activity would be zero-rated supply, attracting ‘Nil’ rate of GST - Whether the service rendered by the applicant shall attract payment of any GST and if yes, then the amount of GST that is payable by the Applicant considering the fact that major portion of the service is rendered outside India – HELD - The service rendered by the applicant to M/s. SmartPoint Technologies and M/s. Antares Vision India, both of which are located in India, would fall under either 'Inter-state' supply or 'Intra-state' supply and would accordingly attract applicable GST. The applicant had segregated the non-compete fee based on the domestic and export supply of M/s. SmartPoint Technologies, and the Authority accepted that 98.57% of the non-compete fee received by the applicant would fall under 'export of services' and attract zero-rated GST, while the balance 1.43% would attract applicable GST as inter-state and/or intra-state supply. [Read less]

GST – Tamil Nadu AAR - Taxability of supply of construction services, Value of supply - Applicant self-acquires a piece of land, develops it into a layout, and enters into a MOU with prospective buyers for purchase of land and construction of residential houses. Two separate agreements are entered - one for sale of plot (sale deed) and the other for construction of residential house (construction agreement). The applicant charges a single amount in the MOU which includes considerations attributable towards both sale of land and construction of residential house - Whether GST can be charged at 18% on the amount charged in... [Read more]

GST – Tamil Nadu AAR - Taxability of supply of construction services, Value of supply - Applicant self-acquires a piece of land, develops it into a layout, and enters into a MOU with prospective buyers for purchase of land and construction of residential houses. Two separate agreements are entered - one for sale of plot (sale deed) and the other for construction of residential house (construction agreement). The applicant charges a single amount in the MOU which includes considerations attributable towards both sale of land and construction of residential house - Whether GST can be charged at 18% on the amount charged in the construction agreement instead of 1.5%/7.5% on the total amount charged as per the MOU – HELD - The activity rendered by the applicant is in the nature of ‘original works since the applicant is constructing a new building. The applicant enters into a MOU with the prospective buyers for sale of land and construction of residential house. Therefore, it fits into the definition of ‘single residential unit’ - The applicant is eligible to charge GST at 1.5% for construction of affordable residential apartments and at 7.5% for construction of other than affordable residential apartments as per Entry 3(i) and 3(ia) of Notification No. 11/2017-CT(Rate) read with Notification No. 03/2019-CT(Rate), subject to conditions. The activity of construction by the applicant involves both supply of goods and supply of services, and is classified as 'supply of service' as per Schedule II of the CGST Act. The entire consideration, including the value of land, is liable to GST at the applicable rates - The applicant is liable to charge GST at 1.5%/7.5% on the total amount charged, including the value of land, as per the applicable provisions. The value of land shall be deemed to be one-third of the total amount charged, and the applicant cannot claim the actual value of land as per the sale deed – Ordered accordingly - If GST is to be charged at 1.5%/7.5%, can the value of land as per the sale deed be considered instead of the deemed value of one-third of the total amount charged – HELD - The taxable value for the construction services supplied by the applicant is governed by the provisions of Para 2 of Notification No. 11/2017-CT(Rate) as amended by Notification No. 03/2019-CT(Rate). Accordingly, the applicant is eligible to avail only the deduction of one-third of the total amount charged for the supply for arriving at the taxable value of supply, and cannot claim the actual value of land as per the sale deed. [Read less]

GST – Andhra Pradesh AAR - Classification and applicable GST rate on Paddle Wheel Aerator and its Parts - Applicant is engaged in manufacturing and supply of Paddle Wheel Aerators and their parts used exclusively in aquaculture ponds for shrimp, fish, crab, and related farming activities - Whether the Paddle Wheel Aerator is correctly classified under HSN 8436 80 90 – HELD - The Paddle Wheel Aerator is correctly classifiable under HSN 84798999 as "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter", as it aligns with the mechanical function of water agita... [Read more]

GST – Andhra Pradesh AAR - Classification and applicable GST rate on Paddle Wheel Aerator and its Parts - Applicant is engaged in manufacturing and supply of Paddle Wheel Aerators and their parts used exclusively in aquaculture ponds for shrimp, fish, crab, and related farming activities - Whether the Paddle Wheel Aerator is correctly classified under HSN 8436 80 90 – HELD - The Paddle Wheel Aerator is correctly classifiable under HSN 84798999 as "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter", as it aligns with the mechanical function of water agitation and oxygen transfer, rather than being reclassified under HSN 8436 which targets land-based agricultural, horticultural, or poultry machinery - Paddle wheel aerators warrant continued classification under HSN 84798999 at the applicable GST rate rather than a shift to HSN 84368090 post issuance of Notification No. 9/2025-Central Tax (Rate), dated 17th September 2025 - The correct GST rate applicable on the Paddle Wheel Aerator is 18% - Ordered accordingly - Whether the exclusive parts of the Paddle Wheel Aerator are correctly classifiable under HSN 8436 99 90 at 5% GST – HELD – The parts like Float Assembly, Paddle Wheel Impellers, Frame and Rods, Power train, and Protective Dome Cover, which are designed and used exclusively as parts of the Paddle Wheel Aerator, classify under their material/function (e.g., 8479 parts if tied to 8479 machines), not automatically with a proposed 8436 heading unproven for the complete unit. Exclusive use requires the principal machine's classification, preserving 18% where 8436 does not apply. [Read less]

GST - Andhra Pradesh AAR - Exemption from GST on Guarantee Commission – Applicant raised fund from the debt market for which the Government of Andhra Pradesh provided guarantees. The applicant is liable to pay a 5% guarantee commission to the State government on the value of the guarantee - Whether the guarantee commission payable by Applicant to the State Government, in respect of guarantees provided for the issuance of bonds, qualifies for exemption from levy of GST under Entry No. 34A of Notification No. 12/2017–Central Tax (Rate), as amended - HELD - The Entry No. 34A of Notification No. 12/2017–Central Tax (Rat... [Read more]

GST - Andhra Pradesh AAR - Exemption from GST on Guarantee Commission – Applicant raised fund from the debt market for which the Government of Andhra Pradesh provided guarantees. The applicant is liable to pay a 5% guarantee commission to the State government on the value of the guarantee - Whether the guarantee commission payable by Applicant to the State Government, in respect of guarantees provided for the issuance of bonds, qualifies for exemption from levy of GST under Entry No. 34A of Notification No. 12/2017–Central Tax (Rate), as amended - HELD - The Entry No. 34A of Notification No. 12/2017–Central Tax (Rate), as amended, exempts services supplied by the State Government to its undertakings by way of guaranteeing the loans taken by such undertakings. The CBIC Circular No. 154/10/2021-GST dated 17.06.2021 also clarified that guaranteeing of loans by the State Government for its undertakings is specifically exempt under the said entry. Since applicant is a State Government undertaking and the guarantees are provided by the State Government for its borrowings, the guarantee commission paid by the applicant is eligible for the exemption - The guarantee commission payable by applicant to the Government of Andhra Pradesh, in respect of guarantees provided for the issuance of bonds, qualifies for exemption from levy of GST under Entry No. 34A of Notification No. 12/2017–Central Tax (Rate), as amended by Notification No. 14/2018–Central Tax (Rate) dated 26.07.2018, read with Circular No. 154/10/2021 dated 17.06.2021 – Ordered accordingly [Read less]

GST – Tamil Nadu AAR – Taxability of supply of food services, Eligibility of input tax credit and charging GST on outward supply of food, Supply of goods or supply of services – Applicant is engaged in the business of supplying food and beverages to corporate entities. The applicant procures cooked food from empaneled kitchens and coordinates the delivery to the corporate clients through outsourced logistics providers. The applicant does not have its own kitchen or prepare the food themselves - Whether the applicant liable to GST on the outward supply of food – HELD - The applicant undertakes to deliver food items ... [Read more]

GST – Tamil Nadu AAR – Taxability of supply of food services, Eligibility of input tax credit and charging GST on outward supply of food, Supply of goods or supply of services – Applicant is engaged in the business of supplying food and beverages to corporate entities. The applicant procures cooked food from empaneled kitchens and coordinates the delivery to the corporate clients through outsourced logistics providers. The applicant does not have its own kitchen or prepare the food themselves - Whether the applicant liable to GST on the outward supply of food – HELD - The applicant undertakes to deliver food items at the client’s location. Apart from this, the applicant is also involved in the overall logistics relating to the delivery of food to the client - The activity of the applicant cannot be considered as a mere ‘supply of goods’, but as the applicant is involved in providing a composite supply, with supply of logistics services along with supply of food, the same is liable to be treated as a ‘supply of service’ as laid down in clause (b) to para 6 of Schedule II to the CGST Act, 2017 - The overall supply of food services rendered by the Applicant falls rightly under the SAC 996337 – The activity of supply of food undertaken by the applicant falls under entry No.7(vi) of the service rate Notification No. 11/2017-CT(Rate), dated 28.06.2017, as amended, being the residual entry, thereby attracting 18% GST - The applicant cannot charge GST according to the nature of food being supplied by them, and they are liable to charge GST at 18% on the supply of service involving food to their clients, as per Sl. No. 7(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - the applicant is eligible to avail ITC on the inward supply of goods/service – Ordered accordingly - Whether the applicant is eligible to avail ITC on the inward supply of goods/service – HELD – The sl. No. 7(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, does not have any condition for the availment of ITC, unlike the other entries from Sl. Nos. 7(ii) to 7(v) of the said notification. Further, the proviso to Section 17(5)(b)(i) of the CGST Act, 2017 allows the availment of ITC where the inward supply of goods/service is used by the registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. Since the applicant's inward supply of goods/service is used for making an outward composite supply of food and service, in the same line of business, the applicant is eligible to avail ITC. [Read less]

GST – Tamil Nadu AAR - Admissibility of Input Tax Credit on Construction of Immovable Property for Rental Purposes - The applicant is engaged in the business of constructing commercial buildings and leasing them out to various tenants - Whether the applicant is eligible to claim ITC on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – HELD - The provisions of Section 17(5)(d) of the CGST Act, 2017 blocks the ITC in respect of goods or services received for construction of an immovable property (other ... [Read more]

GST – Tamil Nadu AAR - Admissibility of Input Tax Credit on Construction of Immovable Property for Rental Purposes - The applicant is engaged in the business of constructing commercial buildings and leasing them out to various tenants - Whether the applicant is eligible to claim ITC on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – HELD - The provisions of Section 17(5)(d) of the CGST Act, 2017 blocks the ITC in respect of goods or services received for construction of an immovable property (other than plant and machinery) on the taxable person's own account, even when used in the course or furtherance of business. The construction of a mall or commercial complex would fall under the category of an 'immovable property' and not 'plant and machinery', and hence, the restriction under Section 17(5)(d) would apply – Further, the recent amendment to Section 17(5) to replace the phrase 'plant or machinery' with 'plant and machinery', with retrospective effect from July 1, 2017, effectively settles the issue and precludes the interpretation of a building as 'plant' for the purposes of ITC. The phrase 'on own account' in Section 17(5)(d) should be interpreted to include construction intended for leasing out, and hence, the applicant is not eligible for ITC on the construction of the commercial building - The applicant is not eligible to claim Input Tax Credit on goods and services used for the construction of an immovable property (commercial building) which is intended to be used for the purpose of letting out on rental basis – Ordered accordingly [Read less]

GST – Andhra Pradesh AAAR - Taxability of assignment of leasehold rights, Applicability of Gujarat High Court judgment in M/s Gujarat chamber of Commerce and Industry case - Appeal against the Advance Ruling Order which held that the assignment of leasehold rights is a supply of service liable to GST, and that the recovery of land development costs by the appellant from the transferee is also a taxable supply of service under GST - Appellant contended that the assignment of leasehold rights should be treated as a 'sale of land' and therefore not liable to GST. The appellant also challenged the AAR's findings on the taxab... [Read more]

GST – Andhra Pradesh AAAR - Taxability of assignment of leasehold rights, Applicability of Gujarat High Court judgment in M/s Gujarat chamber of Commerce and Industry case - Appeal against the Advance Ruling Order which held that the assignment of leasehold rights is a supply of service liable to GST, and that the recovery of land development costs by the appellant from the transferee is also a taxable supply of service under GST - Appellant contended that the assignment of leasehold rights should be treated as a 'sale of land' and therefore not liable to GST. The appellant also challenged the AAR's findings on the taxability of land development costs – HELD - The AAR correctly concluded that the assignment of leasehold rights is a supply of service under the GST law, as it involves the grant of right to use immovable property for consideration – The Section 7 read with Paragraph 2(a) of Schedule II unequivocally classifies the grant of right to use immovable property for consideration, as a supply of service. As correctly held in the AAR’s order, what is transferred in the present case is only the right to use the demised premises for the remaining period of the lease, and not ownership of the land itself - Further, the AAR has correctly observed that the view taken by the Hon’ble Gujarat High Court namely, that the assignment of leasehold rights in land constitutes a transfer of immovable property and is therefore outside the scope of GST, may not be consistent with the statutory framework of the GST regime. In view of the fact that the Departmental appeal against the said decision has been admitted by the Hon’ble Supreme Court, the Gujarat High Court decision relied by the appellant has not attained any finality - The AAR has correctly concluded, the intention of the GST law is to tax all transactions involving transfer of rights in immovable property that do not transfer title. The assignment of leasehold rights, even when long-term or for substantial consideration, does not change the nature of the transaction from a service to a sale of land - In light of the clear statutory mandate, persuasive advance rulings from other States, and CBIC Circular No. 44/18/2018-CGST dated 02.05.2018, which confirms taxability of leasehold assignments, the AAR’s conclusion that GST is applicable on the consideration payable by the transferee, is legally sound and requires no interference - The Advance Ruling Order is upheld and the appeal filed by the appellant is dismissed - Taxability of land development cost – HELD - The activities undertaken by the appellant to develop the land, such as formation of roads, drainage, levelling etc., enhance the usability and value of the demised premises, and therefore constitute an independent taxable service supply. The recovery of land development costs by the appellant represents a distinct and identifiable supply of construction services, which is taxable under GST - Moreover, the reimbursement of amount made by the transferee is separately identifiable, distinct from the consideration for leasehold rights, and represents consideration for services rendered by the appellant. The AAR rightly concluded that such recovery constitutes supply of services under Section 7 and attracts GST at the appropriate rate. [Read less]

GST - Andhra Pradesh AAR - Pre-packaged and labelled goods - Taxability of pre-packaged frozen shrimp - Whether the export of processed frozen shrimps, which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), is subject to GST - HELD - Neither the Notification no 6/2022-CT(Rate) dated 13.07.2022, nor the Legal Metrology Act, 2009 makes any differentiation with regard to applicability of GST on exports of goods/ mentioning of declarations or pre packed commodities for export - In the instant case, the supply of shrimps in pouches or boxes of upto 25kg, which are duly pre... [Read more]

GST - Andhra Pradesh AAR - Pre-packaged and labelled goods - Taxability of pre-packaged frozen shrimp - Whether the export of processed frozen shrimps, which are packaged in individual printed pouches/boxes and placed inside printed master cartons (up to 25 kg), is subject to GST - HELD - Neither the Notification no 6/2022-CT(Rate) dated 13.07.2022, nor the Legal Metrology Act, 2009 makes any differentiation with regard to applicability of GST on exports of goods/ mentioning of declarations or pre packed commodities for export - In the instant case, the supply of shrimps in pouches or boxes of upto 25kg, which are duly pre-packaged and labelled as per Legal Metrology Act, 2009 is a taxable supply which is neither exempted nor nil rated supply - As per the Notification No. 06/2022-CT (Rate), dated 13th July 2022, GST is applicable on supply of such 'pre-packaged and labelled' commodities attracting provisions of Legal Metrology Act, 2009. Therefore, where the quantity involved is 25Kgs or less in respect of specified commodities including shrimps which are pre-packed, they would mandatorily get covered within the ambit of Legal Metrology Act, 2009, and the rules made thereunder. Accordingly, GST would be applicable on the supply of 'pre-packaged and labelled' shrimps, weighing upto 25 kgs, and it will be liable for 5% GST, irrespective of the fact whether it is for domestic supply or for export outside the country - Ordered accordingly [Read less]