NOTIFICATIONS
CGST Rules, 2017 have been amended to provide for physical verification of business premises for grant of registration where Aadhaar number is not authenticated
Amendments have been made in Rule 8, Rule 9 and Rule 25 of the CGST Rules, 2017 to bring in force the provisions relating to compulsory Aadhaar authentication for the grant of registration under GST laws, failing which such registration shall be granted on the basis of physical verification of the business premises. Amended rules also provide for the timelines within which application for registration shall be disposed off by the concerned officer. Rules also provide for the timelines on expiry of which registration shall be deemed to have been provided.
Notification No. 62/2020-Central Tax dated August 20, 2020
COURT RULING
Validity of detention of goods on the ground of non-mentioning of IGST amount on e-way bill
Rule 138A nowhere requires the mentioning of GST amount on e-way bill. Hence, goods cannot be detailed merely on account of non-mentioning of GST amount on e-way bill. Detention notices are quashed and Department is directed to release the goods and the vehicles.
M/s Vishnu Gen Power v. The Assistant State Tax officer (Kerala HC)
Refund of IGST paid on Ocean freight in terms of Entry no. 10 of notification no. 10/2017-IGST dated June 28, 2017
The provisions, as provided by notification no. 10/2017-IGST and notification no. 08/2017-IGST, relating to levy of GST on ocean freight for services provided by a person located in a non-taxable territory by way of transportation of goods by vessel from a place outside India up to the customs station in India, have been held as ultra vires by Hon’ble Gujarat High Court in the case of Mohit Minerals and others. Accordingly, IGST paid in terms of Entry 10 of Notification no. 10/2017-IGST has been directed to be refunded to the taxpayer.
Bharat Oman Refineries Limited v. Union of India (Gujarat HC)
Penalty order under Section 129(3) of CGST Act, 2017 is not sustainable where principles of natural justice are not followed
No opportunity of being heard was given to the taxpayer before passing the order. Further, the documents relied upon by the department were neither brought to the notice of the taxpayer nor such taxpayer was permitted to cross-examine the witness with reference to the said document. Further, also, no opportunity was provided to the taxpayer to produce additional documents. The order issued hereunder is clearly a contravention of principles of natural justice and the same is hereby remanded back to the department to be considered afresh in accordance with the law after providing sufficient and reasonable opportunity to the taxpayer.
M/s Thoppi Agencies v. the Assistant Commissioner of Commercial Taxes (Karnataka HC)
Rejection of anticipatory bail in an offence relating to circular trading by claiming input tax credit without actual receipt of goods or services in contravention of Section 132(1) (b) and (c) of CGST Act, 2017
Provisions contained under Section 122 to Section 138 are not subjected to ‘assessment’. Both the chapters, i.e. Chapter XIX and Chapter XII are distinct and not subject to each other. Section 69 also empowers Commissioner to order and authorize the arrest of a person if he has ‘reason to believe’ that the person has committed an offence specified in Section 132 (1) which is punishable under Section 132(2). Hence, the contention of the applicant that unless the GSTR 3B are verified and liability is determined, prosecution cannot be initiated, is not sustainable. Accordingly, pre-arrest bail application is rejected.
Mr. Ashok Kumar & Mrs. Sheela v. Commissioner CGST & Central Excise, Navi Mumbai Commissionerate (Mumbai HC)
Prayer to invalidate proceedings of search and seizure on account of absence of DIN on summons, seizure and search orders
In terms of Circular 122/41/2019-GST, not all the communications are brought under the mandatory DIN requirements. Seizure order, by the nature of its issuance, would not be included for DIN requirements as there could be no suspicion raised for its issuance, on the date or time it bears and its author. The summon issued, which is also an order of seizure of documents, made in the presence of the appellants to effectuate seizure, does not require a DIN or even subsequent generation of the same.
Kerala Communications Cable Limited v. The Deputy Director, DGGI (Kerala HC)
Validity of assessment order under Section 73 of CGST Act, 2017 without providing an opportunity of personal hearing
Where there is a specific request of the taxpayer to provide personal hearing, it is the duty of the department to provide such personal hearing and the failure to do so is a violation of principles of natural justice warranting the assessment order to be quashed. Hence, the order is set aside and remanded back to the department for fresh consideration.
M/s CSK Realtors Limited v. Assistant Commissioner ST (Telangana HC)
APPELLATE AUTHORITY FOR ADVANCE RULING
Inclusion, in terms of Section 15(2) of the CGST Act, of value of bus passes, issued by the appellant to commuters, in the value of facilitation fee charged from the contractor providing transportation services
No doubt commuters are the ultimate beneficiaries under the contract, but that does not make them the recipient of services provided by the contractor. As the appellant is liable to pay consideration for the services rendered by the contractor, appellant shall be treated as recipient of services. Services are provided by the contractor to the appellant (as recipient) but the customers of appellant are dealt with by the service provider. This arrangement does not make the appellant an intermediary and is not a facilitation services between service provider and commuters. Appellant contention that bus passes issued are in the nature of actionable claims and are not liable for GST, is not maintainable. Hence, value of bus passes shall be includible in the value of facilitation fee charged from the contractor. Order of Authority for advance ruling is hereby upheld.
M/s Ascendas Services India Private Limited (Karnataka AAAR)
Taxability of renting of building by the landlord to the tenant and further sub-letting of the building by tenant to other tenants for residential purposes
The land was allotted to the owner for industrial purposes and not for residential purposes. Therefore, building on this land (allotted for industrial purposes) cannot be construed as residential building and consequently the building rented out by the owner to the tenant is not a residential building. The same shall be covered within the nature of renting of non-residential building and liable to tax at the rate of 18 per cent. Further letting it out by the tenant to other tenants and use of such building by such tenants for residential purposes would not make any difference. Such further sub-letting would also be exigible to tax at the rate of 18 per cent, as such building still continues to be non-residential building. The order of Authority for advance ruling is hereby upheld.
M/s Sri DMS Hospitality Private Limited (Karnataka AAAR)
Taxability of storage charges paid to Central Warehousing Corporation (CWC) for storage of public distribution commodities
There is a difference between ‘storage or warehousing services’ and renting of storage premises’. Mere renting of space cannot be said to be in the nature of services provided for storage and warehousing of goods and exempt in terms of entry no. 54 or 24 of Notification 12/2017-CT (Rate) dated June 28, 2017. Hence, services provided by CWC are to be treated as renting of immoveable property chargeable to tax. The order of Authority for advance ruling is hereby upheld.
M/s Karnataka Food & Civil Supplies Corporation (Karnataka AAAR)
Taxability of services of facilitating supply of goods by overseas principal to its customers
The appellant facilitates the sale of products of overseas companies by undertaking sales presentations to the prospective customers. The appellant is not supplying goods, whose supply he is arranging or facilitating, on its own account. Hence, appellant would not be covered under the exclusion clause of definition of the term ‘intermediary’ and accordingly such services shall be chargeable to tax. The order of Authority for advance ruling is hereby upheld.
Rajendran Santhosh (Karnataka AAAR)
NATIONAL ANTI-PROFITEERING AUTHORITY RULINGS
Imposition of penalty under section 122(1) of the CGST Act, 2017 on violations of anti-profiteering provisions
From the perusal of Section 122(1)(i), it is clear that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide for any penalty for not passing on the benefits of tax reduction and ITC. Hence, penalty under section 122(1)(i) cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. Also, since, no penalty provisions were in existence during November 15, 2017 to March 31, 2018, when the violation of Section 171(1) was made, the penalty prescribed under Section 171 (3A), which has been made effective from January 01, 2020, cannot be imposed retrospectively. Accordingly, the notice dated 01.01.2019 issued for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings are accordingly dropped.
Sh. Pushpak Chauhan & DGAP v. Harish Bakers & Confectioners Private Limited (NAA, GST)
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