The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that activity of bus body building is supply of goods and services depending on the principal supply.
The applicant, Adithya Automotive Applications Pvt. Ltd. is engaged in the body building and mounting of body on the chassis of different models of Tippers, Tankers, Trucks and Trailers. The applicant receives chasis of these items from TATA Motors and other customers on the basis of returnable challan. The applicant has described the manufacturing process as under Fabrication of steel sheets, hollow steel pipes, Round Steel pipes, angles and Channels of steel according to desired / required size. Assembly/ joining of the above-mentioned fabricated pieces of iron and steel by way of welding with help of welding electrodes (copper coated wire) to give a shape of Tipper body. Mounting/fixing of the assembled structure of the Tipper body on the chassis by welding with the help of welding electrodes and also in certain places with nuts and bolts.
The applicant has sought the advance ruling on the issue whether the Body Building Activity on the Chasis provided by the principal would Amount to manufacturing Services Attracting 18% of GST and Whether Clarification of CBIC vide para No. 12.3 of circular no 52/26/2018-GST dated 09.08.2018 Clarifying 18% rate of GST in respect of building of Body of buses would also Apply in the Case of Applicant.
The Coram of Vivek Arya and Abhishek Chauhan ruled that in the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case.
“We find that all inputs required for fabrication of vehicle-body (Tippers, Trailers, Truck, Tankers) on chassis are procured by the applicant and fabricated vehicle-body mounted on the chassis is supplied by the applicant. Therefore, in the instant case, it is a supply of body of the vehicle and the activity of fitting/mounting of vehicle-body on the chassis is an ancillary activity to the principal activity of supply of vehicle-body. Hence, in terms of the clarification issued by the CBEC vide Circular No. 34/8/2018-GST, dated 1-3-2018, the impugned activity is a composite supply, with principal supply being supply of body of the vehicle,” the AAR ruled.
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This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from November 29 to November 4, 2021.
C.C.E. Vs. Bilfinder Neo Structo Construction Ltd.
The Supreme Court directed integration of technology adopted to streamline, monitor all stages in government revenue litigation, to ITAT, CESTAT, and other Tribunals.
The Supreme Court dismissed the Petition challenging pattern of Intermediate, Final CMA Exams scheduled to be conducted Online.
The Supreme Court has dismissed the plea seeking Opt-Out Option for Symptomatic Students Without RT-PCR Report.
The Madras High Court allowed the remission of GST as quantified under SabkaVishwas (Legacy Dispute Resolution) (SVLDR) Scheme subject to payment of 15% interest. The division bench of Justice T.S. Sivagnanam and Justice Sathi Kumar Sukumar Sukumara Kurup ruled that the time limit for completion of the payment of taxes, as quantified in Form-3, also stood extended till 30.09.2020. If that is the date on which the appellants were required to complete the payment, then the appellant’s conduct in approaching this Court by filing the writ petitions on 29.09.2020 and 30.09.2020 can very well be reckoned to be a conduct, which will not be hit by delay and laches.
Kerala Pradesh Gandhi Darshanvedhi Vs. UOI
The Kerala High Court while showing discontent to the Centre said that the Pandemic is not an excuse for the Non-Inclusion of Petroleum products under GST. After perusing the statement filed on behalf of the Director of Goods and Services Tax Council, the bench observed, “Even though the matter was taken in the 45th GST Council meeting, three issues seemed to have been considered by the Council for bringing the petroleum products under the GST regime, i.e., (i) the matter involves high revenue implications, (ii) requires larger deliberations and (iii) during pandemic times, it would be difficult to bring petroleum products under the GST regime.” The court observed, “We are not satisfied with the reasons. There should be some discussion and genuine reasons as to why petroleum products cannot be brought under the GST regime. Further, the pandemic period cannot be cited as a reason. It is well known that even during the pandemic, several decisions were taken involving revenue, after deliberations.”
State Tax Officer Vs. Y.Balakrishanan
The Kerala High Court held that the basis for calculating a fine in lieu of confiscation under the GST Act is only market value and not the Maximum Retail Price (MRP). The single bench of Justice Bechu Kurian Thomas held that if the goods that are subject to confiscation proceedings carries an invoice and the Proper Officer has no dispute on the value mentioned in the invoice based upon a preliminary appreciation of the amount payable for goods or services of a like-kind or quality, at or about the same time and at the same commercial level, then that shall be the market value. If on the other hand, the tentative amount or the amount assumed to be the market value preliminarily is disputed by the taxpayer, it calls for a determination during adjudication, where an opportunity for showing the true market value of the property will be available to the taxpayer. A reading of the definition, no doubt, reveals that the statute does not reckon MRP as the criteria for determining the fine leviable. The intention and the explicit words used in the statute clearly indicate that the proper officer cannot base the fine on the MRP imprinted on the goods if there are other materials available to fix the market value. The Kerala High Court has held that the goods can be released on payment of the fine in lieu of confiscation during the process of adjudication and post-adjudication.
In a major relief to Nayara Energy, the Gujarat High Court directed the GST Authority to disburse the GST Refund of Rs. 50.88 Crores along with Interest as technical glitch cannot be reason for non-payment. The court ordered that the authority concerned may also consider of taking in advance, the amount of Rs.39,05,121/- from the petitioner of the sum of the Welfare Fund and making the payment to the amount of Rs.51,27,47,703/- to the petitioner is entirety, if that can act as a solution before the software is improvised. However, if nothing materializes, let the amount be paid at the end of four weeks to the petitioner without fail with interest. If not paid at the end of four weeks, the rate of interest on the sum due shall be 12% on the entire sum from the due date of payment till the actual date of payment.
Kashmir Kumar Agrawal Vs. State of Odisha
The Orissa High Court granted bail to a person accused of creating fictitious firms, availing bogus Input Tax Credit (ITC) worth Rs.117.25 crores.
Rajputana Stainless Ltd. Vs. UOI
The Gujarat High Court directs matters back to the GST Authority to cross examine witnesses whose statements have been recorded. The division bench of Justice Sonia Gokani and Justice Hemant M. Prachchhak held that while holding in principle that it is the right of the parties to make a request for the defence witnesses of even those witnesses who have been dropped out by the Revenue, the request, in the instant case, was not of examining them as defence witnesses till the learned counsel stepped in, but, of cross-examining them without examining them as defence witnesses and that simply is impermissible and hence, the order impugned cannot be interfered with.
Schlumberger Solutions Private Limited Vs. Commissioner Centre GST
The Punjab and Haryana High Court quashed the Form SVLDRS-2 by Designated Committee as Taxpayers cannot be punished for depositing the amount under different heads. The division bench of Justice Ajay Tewari and Justice Pankaj Jain held that the amount deposited by the petitioner falls in the second category. The provision only talks of amount irrespective of whether it has been paid as tax or interest or penalty. Thus, the view taken by the Designated Committee cannot be sustained. There is another side to the story. Had the petitioner remitted the entire amount paid by him towards tax, the respondents would have given credit of the entire amount and his interest liability would have been waived off as well. The petitioner cannot be punished for depositing the amount under different heads once the provision mandates to discount the amount paid during the investigation dehors the head it has been deposited under.
Gurdit Dang Vs. State of Odisha
The Orissa High Court granted the bail to a person accused of wrongful utilization of bogus Input Tax Credit (ITC) on the strength of fake invoices without physical movement of goods.
Trivedi and Sons Pvt. Ltd. Vs. UOI
The Delhi High Court directed the Goods and Service Tax (GST) Authority to enable the taxpayer to file revised TRAN-1 Form electronically or allow Input Tax Credit (lTC) by manually revising TRAN-1.
Smruti Ranjan Sahoo Vs. State of Orisha
The Orissa High Court granted bail to a person alleged of Wrongfully availing and passing Input Tax Credit (ITC) in the name of Bogus Firms.
The Karnataka High Court allowed the deduction under Section 80IB (10) on construction of housing projects as the size or number of housing projects undertaken on a minimum area of one acre of land is not significant.
The Kerala High Court upheld the addition as diversion of funds of the Trust amounting to a violation of exemption under section 11 of the Income Tax Act. The division bench of Justice S.V.Bhatti and Justice Basant Balaji held that the CIT(A) is justified in directing the A.O. to treat an amount of Rs. 72,45,000 as advance as income to the assessee. The assessee was paying interest on borrowings, and therefore, notional interest at the rate of 18% on the advance of Rs.72,45,000 was rightly brought to tax as income of the assessee by the A.O. Therefore, the court saw no reason to interfere with the findings of the CIT (A).
Mohamed Babu Paramboor of Malappuram Vs. UOI
The Kerala High Court has admitted the batch of petitions challenging the constitutional validity of the Faceless Assessment Procedure under Section 144B of the Income Tax Act.
The Rajasthan High Court quashed the Reassessment Notice issued under Income Tax Act after April 01, 2021. The single-judge bench of Justice Inderjeet Singh in the light of the Division Bench of the Allahabad High Court in the matter of ‘Ashok Kumar Agarwal Vs. Union of India wherein it was held that the Ordinance, the Enabling Act, and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned Notifications dated 31.03.2021 and 27.04.2021 (respectively) are concerned, we declare that the said Explanations must be read, as applicable to reassessment proceedings as may have been in existence on 31.03.2021 i.e. before the substitution of Sections 147, 148, 148A, 149, 151 & 151A of the Act. Consequently, the reassessment notices in all the writ petitions are quashed.
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The National Company Law Appellate Tribunal (NCLAT), New Delhi held that goods lying in the Customs bonded warehouses cannot be considered assets of the Corporate Debtor.
The Respondent, claims that the Corporate Debtor Company imported materials presently lying in customs bonded warehouses at specific locations for construction and building the ships. These ships were further to be exported after the completion of manufacturing. Hence, the Corporate Debtor Company availed its benefit under the Export Promotion Capital Goods Scheme (EPCG Scheme) (the Notification 12/2012 dated March 17, 2012) and other related schemes/notifications. Consequently, the Corporate Debtor was provided with a license under the EPCG Scheme concerning the Material.
The Corporate Debtor had abandoned the imported goods in the Customs warehouses for several years and failed to pay the import duty and other charges and had not taken any steps to take possession of those goods for several years.
The coram of Justice M. Venugopal, Mr. V. P. Singh, and Dr. Ashok Kumar Mishra held that the importer had lost his right to the imported goods. Consequently, the Customs Authorities are fully empowered under Section 72 of the Act to sell those goods to recover the government dues. The Liquidator has no right to take into possession over those goods for which the Corporate Debtor’s title is deemed relinquished by implication of law. Even before initiating the CIRP, the Corporate Debtor Company could not have secured the possession of the imported goods except by paying the customs duty. The Resolution Professional/Liquidator, who virtually represents the Company, cannot stand on a better footing than the Corporate Debtor itself.
The NCLAT further held that by submission of Claim in response to the Notice issued by the Liquidator, it cannot be presumed that the Custom Dept. had relinquished its right over the property and submitted to the jurisdiction of the Liquidator.
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The Special Court under Prevention of Money Laundering Act (PMLA), Bombay granted interim bail to CA for 10 days due to his wife’s injury.
The Applicant, Madan Gopal Chaturvedi prayed for temporary bail for a few days. The reason is that his wife slipped in the bathroom and fell on the hard bathroom floor and suffered grievous injury on her back, spine as well as head. Applicant’s acquaintance took her to the Axis Multispeciality Hospital. Where MRI scan and screening of the brain as well as the whole spine was undertaken. There was a substantial compression and injuries on L4-L5 of the spine and the same was revealed in an MRI report. She was discharged on the same date i.e. on 18.11.2021 with advice of bed rest. However, her back injury and pain was aggravated. Therefore on 21.11.2021 she was readmitted in Axis Multispeciality Hospital. Eversince she has been in the said hospital and suffering from Cerebral Concussion with Acute Prolapse Intervertebral Disc L4-L5 with cervical herniation. It is further contended that, she has difficulty in walking as sensation in left ankle. Applicant has two children who are completely dependent on his wife.
His son and daughter are attending their education online. In 2020 applicant’s elder son had suffered reciprocity problem and received treatment for the same. Applicant specifically contended that, due to these reasons he needs with children to assist and help them in their day-to-day activities. His children are completely alone as his wife is in the hospital and he has been jail since long i.e from 23.01.2021 till date. His family needs moral support as there is no one to look after them and the acquaintances have certain limitation. With this, it is prayed to allow the application on humanitarian ground.
Mr. Mihir Gheewala and Ld. Adv. Mr. Vivek Babar for the accused urged that, they are not praying any permanent bail.
The Spl. Judge under PML Act, M.G. Deshpande noted that rhere is no one except two children, in the family of the accused, to look after their mother. I have already noted above whatever medical papers forwarded by Dr. Umesh Shetty have no history like issuing fake medical certificates to the accused and their families for getting bail from the Court. When there is no history as such and Dr. Umesh Shetty is a well known Orthopedic Surgeon in Mumbai, his opinion cannot be discarded by completely disbelieving him. Therefore, the impact on the children and genuine need of their father to cope up with the same is an ardent need which is reflected from the application and medical papers.
“The applicant be released on temporary bail from 06.12.2021 till 15.12.2021, purely on humanitarian ground, to attend circumstances prevailed upon his family due to hospitalization of his wife, on his furnishing PR bond of Rs.50,000/- and cash security of like amount,” the court ordered.
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The Punjab and Haryana High Court quashed the Form SVLDRS-2 by Designated Committee as Taxpayers cannot be punished for depositing the amount under different heads.
The petitioner, Schlumberger Solutions Private Limited was served with a show-cause notice dated 12.04.2019 whereby a further amount of Rs.9,86,53,074/- was sought to be recovered on account of cenvat credit. This amount included interest and penalty as well. Before the proceedings on the aforesaid show cause notice could proceed further, an amnesty scheme by way of the Finance (No.2) Act, 2019 was introduced by the Central Government. The main objective of the scheme is to provide for the settlement of pending disputes related to indirect taxes. The petitioner being eligible under the said scheme availed the same by making the declaration in Form SVLDRS-1. As per the petitioner, his declaration was accepted though with a variation in the computation of the amount payable. Designated Committee, i.e. respondent No.2 disagreeing with the petitioner’s computation issued Form SVLDRS-2 on 28.01.2020 wherein the difference in the amount payable was calculated to be Rs.1,50,95,499.
The Form SVLDRS-2 also contained remarks from Designated Committee which says “The deposit amount indicated by the declarant also includes amounts paid towards interest and penalty. Duty, Interest & penalty are totally different terms under Indirect Tax Laws. There are separate provisions for these which are invoked for different purposes. Accordingly, payments towards these are made under separate heads. Thus, payments made under one head cannot be transferred or adjusted against another head. The calculation table of the SVLDRS form-I also indicates that pre-deposit/any other deposit of duty is to be adjusted during the calculation of tax dues less tax relief. Accordingly, payments made under the heads of interest and penalty are not included in the deposit.”
The division bench of Justice Ajay Tewari and Justice Pankaj Jain held that amount deposited by the petitioner falls in the second category. The provision only talks of amount irrespective of whether it has been paid as tax or interest or penalty. Thus, the view taken by the Designated Committee cannot be sustained. There is another side to the story. Had the petitioner remitted the entire amount paid by him towards tax, the respondents would have given credit of entire amount and his interest liability would have been waived off as well. The petitioner cannot be punished for depositing the amount under different heads once the provision mandates to discount the amount paid during the investigation dehors the head it has been deposited under.
The court quashed the comments of Designated Committee informs SVLDRS-2 and SVLDRS-3; and directed the Designated Committee to reconsider the claim of the petitioner within two weeks from the receipt of the certified copy of the order by adjusting amounts paid towards interest and penalty, in accordance with law and the petitioner is directed to make the payment within two weeks from the date Designated Committee issues SVLDRS-3.
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The Maharashtra Authority of Advance Ruling (AAR) held that no GST Exemption to Mahindra Splendour CHS if monthly contribution exceeds Rs. 7,500 per month.
The applicant, M/s Mahindra Splendour Co-operative Housing Society Ltd, the Applicant is a housing society whose main objects include: managing, maintaining and administering its property; raising funds for achieving the said objects etc.. by way of collecting contributions/charges from members of the society, like Property taxes, Maintenance charges, Water and electricity charges. Sinking and Building repair Fund, Club House charges, Interest on delayed payment, etc.
The applicant has sought the advance ruling on the issues whether the applicant is liable to pay GST on the contribution received from its members, If yes, whether the applicant can avail the benefit of exemption under entry no. 77 of Notification no.12/2017-CTR dated 28th June, 2017 for the value upto Rs.7,500/- per month per member and in case the said monthly contribution exceeds Rs. 7,500/- per month, then the GST leviable only on differential value in excess of Rs. 7,500/-.
The coarm of Rajiv Magoo and T.R.Ramnani held that the applicant is liable to pay GST on the contribution received from its members. In case the monthly contribution exceeds Rs. 7,500/- per month, then the GST is leviable on the entire value of the monthly contribution collected. The charges, collected by the society on account of property tax, electricity charges and other statutory levies would only be excluded while calculating the threshold limit of Rs. 7,500/-.
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The Goods and Services Tax Network (GSTN) has issued module wise new functionalities deployed on the GST Portal for taxpayers.
November 2021
A functionality has been introduced for taxpayers to withdraw their application for cancellation of registration, filed in Form REG-16, provided no action has been initiated by the tax officer against their application. Now the effective date of suspension of a taxpayer is also displayed on the Portal when his/her profile is accessed using “Search Taxpayer” functionality.
A functionality has been introduced for taxpayers to withdraw their application for cancellation of registration, filed in Form REG-16, provided no action has been initiated by the tax officer against their application. Now the effective date of suspension of a taxpayer is also displayed on the Portal when his/her profile is accessed using “Search Taxpayer” functionality.
To enable Tax Officers to issue PMT03, an undertaking has to be filed by the taxpayers. The text in the undertaking form to be submitted by the taxpayer has been altered to include both credit and cash ledgers for enabling re-credit of inadmissible ITC to respective ledgers.
July-September, 2021
In terms of the Notification No. 34/2021 – CT, dated 29th Aug 2021, the time limit for filing of application for revocation of cancellation of registration has been extended to 30th September, 2021, where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 and 31st August, 2021.
The benefit of said notification is extended to all the cases where cancellation of registration has been done under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act, 2017 and where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 and 31st August, 2021. It is further clarified that the benefit of notification would be applicable in those cases also where the application for revocation or cancellation of registration is either pending with the proper officer or has already been rejected by the proper officer.
A new functionality has been implemented for taxpayers on the Portal to check the status of their bank account detail updation. In case they have not updated it within 45 days of their first time login, the system will now prompt them to update it.
The taxpayers who avail ITC fraudulently or furnish details of outward supplies in FORM GSTR-1 for one or more tax periods in excess of their liability in Form GSTR-3B shall now be suspended on the Portal.
The taxpayers shall be intimated about the suspension in FORM GST REG-31, requiring them to explain, within thirty days, as to why their registration should not be cancelled.
Annual return in Form GSTR-9 is auto-drafted, based on returns filed in Form GSTR-3B and outward supply statements filed in Form GSTR-1.
The auto-population of data from GSTR-3B (Qtrly) and IFF (for M1 & M2)/ GSTR-1 (Qtrly) in the relevant tables of GSTR-9 has been enabled for the taxpayers under QRMP scheme.
April – June, 2021
The time for filing the ‘Application for Revocation of Cancellation’ for those applicants, for whom the due date to file the same falls between 15th April to 30th May, 2021, has been extended till 31st May, 2021. Further extended till 30th June, 2021, vide Notification No. 24/2021 CT dated 01.06.2021.
The taxpayers under QRMP Scheme have been provided with an optional Invoice Furnishing Facility (IFF), to furnish details of their B2B Invoices and amendments thereto, for first two months of a quarter. Following enhancements have been made in IFF. Taxpayers can now MOVE the records saved in their IFF of first month of a quarter (if the time for filing it has expired) to IFF of the second month of the quarter. Taxpayers can also MOVE the records saved in IFF of the first month & second month of the quarter (if the time for filing it has expired) to their quarterly Form GSTR-1 (of the same quarter). Please note that the records can be moved only within a quarter. While preparing IFF/GSTR-1 (of later months of the same quarter) online, in case of saved records, taxpayers will get a pop-up prompting them to either MOVE the records by selecting YES or delete them by selecting NO.
January-March, 2021
The Persons/ applicants applying for new registration in GST, through MCA portal in SPICe-AGILE Form, can now opt for Aadhaar Authentication (while applying for registration).
The field for entering Aadhaar number has been disabled for • Taxpayers in following scenarios While adding Authorised Signatory/Authorised Representative through Non-Core amendment of registration. While adding Promoter/ Partner through Core amendment of registration. Applicants/ taxpayers adding details of Authorised Representative in New Registration application.
Normal taxpayers, irrespective of their filing profile (of quarterly or monthly), have now been provided with a RESET button on the GST Portal, in Form GSTR-1/IFF. This will enable them to delete the entire saved data, for the specific return period, but not yet submitted or filed their Form GSTR-1/IFF.
Registered manufacturers who are required to file quarterly Form GST ITC-04 (to furnish details of inputs or capital goods, sent to a job worker without payment of tax), can now download the data of Table 5 of Form GST ITC-04 (on the GST Portal), after filing the Form, when there is change in the state code, due to merger or creation of a State/ UT. This is to download data, when there is change in State/ UT code, before the goods are received back.
Any taxpayer or an unregistered person aggrieved by any decision or order passed against him/her by an adjudicating authority, may appeal to the Appellate Authority, within three months from the date, on which the decision or order is communicated to him/her. This functionality has now been deployed on the GST Portal, to file online appeal against the refund order, with the respective Appellate Authority.
October-December, 2020
The new functionalities made available for Taxpayers on GST Portal from October till December, 2020 were in respect of Registration, Return Module, E-way Bill, Advance ruling, Taxpayer Dash board and Search Taxpayer Functionality, Miscellaneous, and Webinars conducted. In case of Registration the new functionalities released were in respect of Aadhaar Authentications in Form GST REG-01, during Registration, for all type of taxpayers (except PSU, Govt Bodies, Statutory Body and Local Authority), Filing an application for cancellation of Registration by GST Practitioner (Form GST PCT -06), PAN based Registration details to be shown to Taxpayers, Suspension status of GSTIN in certain cases, Showing Jurisdiction of CBIC and States/ UTs on the basis of PIN. In case of Return Module the new functionalities released were in respect of Quarterly Returns Monthly Payment (QRMP) Scheme, Import of e-invoice data into Form GSTR-1 of the taxpayers, Authentication through EVC, for filing of returns through GSPs, for taxpayers for whom DSC is not mandatory, Auto-populated Form GSTR- 3B in PDF format for the taxpayers, Interest payable in Form GSTR-3B under the CGST and SGST/UTGST heads can now be different, Filing NIL Form GST CMP 08 through SMS, on GST Portal. In case of E-way Bill the new functionalities released were in respect of Online filing of application (Form GST EWB 05) by the taxpayer for un-blocking of E-Way Bill (EWB) generation facility, and Blocking of E-Way Bill (EWB) generation facility for taxpayers with AATO over Rs 5 Cr., after 15th October, 2020. In case of Advance Ruling the functionality in respect of Displaying Annual Aggregate Turnover (AATO) to taxpayer’s on their Dashboard and View of Annual Aggregate Turnover of a Taxpayer, under “Search Taxpayer” on GST Portal (Post Login) was released.
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The Ministry of Commerce and Industries has notified the revised user charges for SEZ-Online services will be as under and would be effective from November 15, 2021.
“Department of Commerce (DoC) had received various requests from the Developers / Co-developers / units in SEZs for rationalization/revision of user charges levied by NSDL from them for the SEZ-Online services. The issue has been examined and after duly examining the issues flagged by the service provider, It has been decided that the revised user charges for SEZ-Online services will be as under and would be effective from 15.11.2021,” the government in the circular said.
The government has notified that the transaction of Rs. 50 excluding the taxes is payable on Bill of Entry / Shipping Bill / DTA Sale / Deemed Export / DTA Procurement with Export Benefit / Zone to Zone Transfer / DTA Procurement / Temporary Removal / Sub-contracting.
In the case of Softex Forms, the charges of 15/- per invoice are applicable. The charges of Rs.5000/- per annum is payable on AMC Fee for Unit and AMC Fee for Developer/Co-developer is Rs.10000/- per annum. The Registration Fee for Unit (one time) is Rs. 25000/- and Registration fee for Developer/Co-developer (one time) is Rs. 50000/-.
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The Kerala High Court held that the basis for calculating a fine in lieu of confiscation under the GST Act is only market value and not the Maximum Retail Price (MRP).
A review petition against the interim order is preferred by the State Tax Officer in respect of the issue of whether section 130(2) of the Act contemplates the release of goods by payment of the fine in lieu of confiscation, even before orders of confiscation are issued. In addition, an incidental question that arises is on the quantum payable as fine in lieu of confiscation.
The genesis of the dispute emerges from an inspection conducted by the officers of the Kerala State GST Department on 03-08-2021, who seized, as per Rule 139(2) of the Central Goods and Services Tax Rules, 2017, beedis, stored by the respondent in this review petition in his different godowns. Orders of prohibition were later issued under Rule 140 of the Rules. For easier comprehension, the review petitioners are hereafter referred to as ‘Tax Officer’, while the respondent will be referred to as the ‘dealer’.
It is appropriate to mention that beedi is an indigenous smoking product like a cigar or a cigarette, made by rolling a dried leaf filled with flaked tobacco and is undoubtedly perishable in nature, with a limited shelf life.
The single bench of Justice Bechu Kurian Thomas held that if the goods that are subject to confiscation proceedings carries an invoice and the Proper Officer has no dispute on the value mentioned in the invoice based upon a preliminary appreciation of the amount payable for goods or services of a like-kind or quality, at or about the same time and at the same commercial level, then that shall be the market value. If on the other hand, the tentative amount or the amount assumed to be the market value preliminarily is disputed by the taxpayer, it calls for a determination during adjudication, where an opportunity for showing the true market value of the property will be available to the taxpayer. A reading of the definition, no doubt, reveals that the statute does not reckon MRP as the criteria for determining the fine leviable. The intention and the explicit words used in the statute clearly indicate that the proper officer cannot base the fine on the MRP imprinted on the goods if there are other materials available to fix the market value.
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The Customs, Excise, and Service Tax Appellate Tribunal (CBIC) has issued the instructions on the import of Sajji Khar/ Papad Khar.
The CBIC said that the import of Sajji Khar/ Papad Khar does not require product approval under FSS (Approval of non-specified food and food ingredients) Regulations, 2017 and these may be considered as “food not specified” till standards are notified by FSSAI.
It is stated that imported consignments of Sajji Khar/Papad Khar do not require product approval under FSS (Approval of non-specified food and food ingredients) Regulations, 2017 and these may be considered as “food not specified” till standards are notified by FSSAI. The imported consignments shall be tested as per the standards for “food not specified” including the standards for heavy metals prescribed under FSS (Contaminants, Toxins, and residues) Regulations, 2011.
It is requested that necessary action may be taken to sensitize officers under your jurisdiction regarding the said matter.
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Saving a part of your income is good practice. And a fixed deposit is a savings and investment scheme that is unaffected by fluctuations in market variables. It fares better than even the PPF and the senior citizen’s savings scheme, which are government-backed and therefore thought to be solid savings schemes.
Here are some reasons why the fixed deposit tops the list:
Investment in a fixed deposit (FD) increases your savings rate and keeps inflation at bay. The FD is also a safety net against the vagaries of an uncertain future. Pension will cover post-retirement month-to-month expenses, but the highest FD rates add to the sense of security.
Immunity against market fluctuations is, perhaps, the single biggest advantage of the fixed deposit. The FD thrives on the back of almost nil risk. Other savings schemes may have their merits, but the fixed deposit is a standalone attraction.
Check the various banks for their fixed deposit schemes, and you will be surprised. Some public sector banks have clinching and the highest FD rates. Therefore, banking on the FD is a wise option. Even the Public Provident Fund pales in comparison.
Mutual funds and stocks will promise higher returns, but they wilt when stacked against fluctuations in market variables. Sudden, unexpected losses are a risk with mutual funds and shares. The FD, on the other hand, sails through on a fixed and unwavering interest rate.
Compared to the PPF, the fixed deposit allows partial withdrawal, and there is no lock-in period. Taking a loan against a fixed deposit, up to a certain percentage, is another advantage. Some public sector banks allow a loan of up to Rs. 4 lakh. Others offer the highest FD rates. And there is no lock-in period. You can invest up to 5 years, or as per your financial goals.
The senior citizens’ savings scheme or SCSS is a savings and incomes scheme for senior citizens aged over 60. It fetches an interest rate of 8.6% and is government-backed. Investment can be up to a 5-year tenure, and the investment can be renewed once. The fixed deposit tenure, on the other hand, is flexible and has the highest FD rates. A fixed deposit for 36 months, for instance, will earn you an interest of up to 8.70%. With some FD, you can opt for periodic payouts – a regular monthly or quarterly income!
The recurring deposit, unlike the fixed deposit, requires recurring contributions of a fixed amount. But there is a flaw when RD is ranged against the FD. The RD interest rate keeps falling with time. The fixed deposit’s one-time payment earns a fixed interest for its entire tenure. The RD’s tenure keeps reducing, and with it, the returns also keep falling. The fixed deposit also allows easier partial and premature withdrawals.
Given these advantages, it’s a no-brainer why people, whether young or old, fall for the fixed deposit as a savings option. The FD stands tall among the array of savings schemes on offer. The fixed deposit is a solid and stolid presence in a financial portfolio.
Recently, the RTI filed by Advocate Nipun Singhvi reveals that the 6 former members of NCLT (4 Judicial And 2 Technical) have completed 5 years of tenure and but not attained 65 years of age.
The RTI reveals 4 Judicial Members namely Bethala Shantha Vijaya Prakash Kumar; Rajeshwar Rao Vittanalla; Ms. Manorama Kumari; R Vardharajan and 2 technical members namely, V Nallasenapathy and Ravi Kumar Duraisamy.
In an RTI filed by Nipun Singhvi, Advocate and RTI activist requesting information on the reappointment status of the NCLT members who had completed tenure of 5 years but have not attained the age of 65 years.
Further, the RTI revealed that the vacancy notice issued by the Ministry of Corporate Affairs has issued advertisement (dated 13.10.2021) as per discussion held in a Committee headed by Chief Justice of India.
Also, the reply further clarifies that there are no separate vacancies for former NCLT Members.
The Selection Committee for appointment and reappointment of Members in NCLT has been constituted under the Chairmanship of Hon’ble Chief Justice of India which discussed the matter in its meeting held on 27.07.2021. Subsequently as decided by the Committee in its meeting held on 09.10.2021 decided to issue advertisements to fill up the vacant posts of Members in NCLT. The advertisement was issued on 13.10.2021.
There is no separate vacancy for the ex-members eligible for reappointment.
As per Section 413 (1) of the Companies Act, 2013, every Member shall hold office for a period of five years from the date on which he/ she enters upon his/her office but shall be eligible for re-appointment for another term of 5 years. Further, as per Section 413(2), a Member shall hold office until he attains the age of 65 years.
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In a major relief to Lenovo, the Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed Service Tax demand as inclusion of turnover of Manufacturing unit for quantification of amount for reversal of CENVAT Credit was appropriate.
The respondent assessee, M/s. Lenovo (India) Pvt Ltd has been providing both taxable and exempted services (trading) and are availing Cenvat credit on input services common to both services. During audit, it was observed that there was short payment, in terms of Rule 6(3A) of CCR, 2004.
The appellant department issued a Show Cause Notice to the appellants, proposing to demand and recover an amount for the period alleging incorrect determination of the amount to be reversed proportionately under Rule 6(3A)(c)(iii) of the Cenvat Credit Rules, 2004. The appellants further proposed to demand credit availed for the period during the course of Audit the appellants reversed credit. The adjudicating authority dropped the demand for the period prior 1.4.2011 on the ground that trading is classified as an exempted service only from 1.4.2011 and observed that since assessee has reversed Rs.67,04,088/- voluntarily, the relevant statutory provisions of Rule 6(2) prevalent during the material point of time, have been satisfied.
With regard to the remaining demand of Rs.43, 83,14,200, for the period from 04/2011 to 03/2015; the objection in the SCN was against inclusion of turnover of the Puducherry manufacturing unit, for quantification of total turnover under Rule 6(3). The adjudicating authority dropped the demand holding that the inclusion of turnover of Puducherry manufacturing unit for the purpose of quantification of amount under Rule 6(3A) is appropriate.
The coarm of Judicial Member, S.K.Mohanty and Technical Member, P.Anjani Kumar ruled that there are only two limitations imposed under Rule 7 of the Rules, for distribution of credit by an Input Service Distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. The manufacturer is therefore, requires registering himself as Input Service Distributor and thereafter is entitled to distribution of credit of such input in the manner prescribed under the law.
The Tribunal while upholding the impugned order ruled that on scrutiny of the service tax registration certificate issued for Puducherry unit is seen that the registration for service tax at Puducherry is only for payment of service tax under reverse charge mechanism on GTA services and on import of taxable services from abroad, which are meant exclusively for the Puducherry manufacturing unit. With regard to the entire remaining activities of the said Puducherry manufacturing unit, the centralized service tax registration No.AABC13372HST001 at Bangalore is applicable, which is as a SERVICE PROVIDER as well as an INPUT SERVICE DISTRIBUTOR. Thereby, inclusion of the turnover of the Puducherry manufacturing unit for the purpose of quantification of amount under the said Rule 6(3) is appropriate. As such, the proposed demand fails on merit.
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The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) restored the original assessment order as a Revision order under section 263 of the Income Tax Act, 1961 is barred by limitation.
The assessee, Royal Western India Turf Club is a resident company engaged in the business of conducting horse races, turf clubhouse, and providing hospitality service to its members and their guests. For the assessment year under dispute, the assessee filed its return of income declaring a total income of Rs.1,49,08,690/-. Assessment in the case of the assessee was originally completed under section 143(3) of the Act vide order dated 06-02-2014 determining the total income at Rs.27,23,84,049/-. Against the assessment order so passed, the assessee preferred appeal before learned Commissioner of Income Tax (Appeals), wherein, substantial relief was granted to the assessee. While giving effect to the order of Commissioner (Appeals), the assessing officer in an order determined the income at nil under the normal provisions of the Act and computed book profit under section 115JB of the Act at Rs.1,39,38,254/-.
When the matter stood thus, the assessing officer received information that the assessee had transferred certain receipts directly to its reserve under the head “life membership fee” etc which included an amount of Rs.2,00,50,000/- representing contribution from certain members towards various infrastructure facilities of the club for the mutual benefit of the members of the club and such contributions are nonrefundable. Being of the view that the receipt of Rs.2,00,50,000/- has escaped assessment, the assessing officer reopened the assessment under section 147 of the Act and ultimately passed an order on 26- 12-2018 under section 143(3) r.w.s. 147 of the Act determining the total income at Rs.2,00,50,000/-.
The assessee submitted the assessment was reopened under section 147 of the Act for the specific purpose of assessing the escaped income of Rs.2,00,50,000/-, being the contribution received from members transferred to the reserve. He submitted the issues on which PCIT held the assessment order to be erroneous and prejudicial for non-inquiry by the assessing officer were never the subject matter of reopening; hence, the assessing officer had no occasion to enquire into those issues.
The coram of Accountant Member, Rajesh Kumar, and Judicial Member, Saktijit Dey held that the original assessment order having been passed on 06-02-2014, the impugned order passed under section 263 of the Act is barred by limitation in view of section 263(2) of the Act.
“We have held that the impugned order passed under section 263 of the Act is barred by limitation, the consequence would be, it has to be declared as invalid and the assessment order has to be restored. Accordingly, we do so,” the ITAT said.
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The Delhi High Court dismissed the plea questioning the Authority of NCLAT Technical Member cancelling Company’s License for deliberately concealing crucial facts.
The petitioner, India Awake for Transparency has sought the issuance of a writ of quo warranto directing Respondent to set out the Authority under which the said Respondent is holding office as Technical Member of National Company Law Appellate Tribunal (NCLAT).
The Petitioner submitted that the appointment of Respondent is in the teeth of the amended provision of Section 411(3) of the Companies Act, 2013. The original provisions of Section 411(3) of the Act provided for qualification for appointment of Technical Members of NCLAT which included a person of proven ability, integrity and standing having special knowledge and experience of not less than 25 years, in law, Industrial Finance, Industrial Management, etc. Challenge was laid to various provisions of the Act including in respect of qualification of Technical Members of NCLAT under Section 411(3) as well as the composition of Selection Committees, which was allowed by the Supreme Court in the case of Madras Bar Association vs. Union of India and provisions of Section 411(3) were specifically struck down. NCLT and NCLAT were brought into existence vide Notification dated 01.06.2016 and after the Company Law Board was wound up, most of the cases pending in the High Courts were transferred to NCLT with the provision of appeal before NCLAT.
The division bench headed by the Chief Justice D.N.Patel and Justice Jyoti Singh the order passed by Regional Director (Southern Region), Ministry of Corporate Affairs, on 17.08.2018 clearly reveals that the license of the Petitioner Company as a Section 8 Company has been canceled and the Petitioner is legally debarred from using the name ‘India Awake for Transparency’, by which name the present petition has been filed.
“We also find that the Ministry of Corporate Affairs’ portal shows the status of the Petitioner Company as ‘inactive’. Apparently, investigations by the SFIO are also underway as stated in the said application,” the court added.
The court found that the Petitioner not only lacks the locus to file the present petition but has also deliberately concealed and suppressed the crucial facts, which have been brought to our knowledge by Respondent and the intervener.
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The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench ruled that the CESTAT is not empowered to allow Interest on Interest for delayed payment of Customs refunds in absence of statutory provision.
The issue raised was whether the appellant, Bochasanwasi Shri Aksharpurushottam Swaminarayan Sansth is entitled to interest on the interest amount.
The appellant has heavily relied upon the Supreme Court Judgment in Sandvik Asia Ltd.
The Commissioner (Appeals) on this issue observed that the decision of the Supreme Court in the Sandvik Asia case was on the subject of the claim for interest on interest which was withheld for a very long period about twenty years and that too without any justification. Besides, that was a case under the Income Tax Act, as also that bare reading of the decision would disclose that the same was granted essentially in the exercise of powers under Article 142 of the Constitution of India. This is apparent from the decision of the Apex Court.
The Commissioner (Appeals) has concluded that being a creature of the statute he has no power to allow interest on interest amount to the appellant. We do not find any infirmity in the above finding.
The Coram of Judicial Member Ramesh Nair and Technical Member P.Anjani Kumar M held that this Tribunal being a creature under the statute of customs Act cannot decide anything beyond the provisions of the statute of the Customs Act. There is no statutory provision for granting the interest on interest. Therefore, the decision on this issue by the Learned Commissioner (Appeals) is legal and correct.
“As regards, the issue i.e. rate of interest, the rate of interest is statutorily prescribed under section 27 (A) read with Notification issued thereunder according to which 6% as rate of interest was prescribed. The departmental officer is bound to follow the statutory provision strictly and therefore, no interest of more than 6% can be calculated. Even this tribunal which is a creature under the statute of Customs Act cannot decide the rate of interest out of the statutory provisions. Accordingly, the rate of interest i.e. 6% decided by the Lower Authority is correct and legal. As regards the judgment cited by the appellant for higher interest, we find that all those cases have been decided either by the Hon’ble Supreme Court or Hon’ble High Court which had inherent powers can fix any rate of interest but this tribunal has no power to decide any rate of interest different than prescribed under the statute. Therefore, Learned Commissioner (Appeals) has rightly held that the Adjudicating Authority has rightly applied a simple rate of interest as 6% P.a. Therefore, the assessee cannot be granted interest at the rate of 15% or any other rate above 6%,” the CESTAT ruled.
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The Madras High Court held that writ petition is not maintainable as Statutory Alternative Remedy under Income Tax Act.
The writ petitioner, Tvl.Sree Karumariamman Granites which is a registered partnership firm, is carrying on business in quarrying and marketing granites. The Tamil Nadu Minerals Limited (TAMIN), which is a Government company invited tenders for raising-cum-selling granites blocks for quarries situate at Sivanthipuram in Ambasamudram Taluk, Tirunelveli District, writ petitioner was the highest bidder, an agreement was entered into and the writ petitioner was awarded the contract by TAMIN. Thereafter, the writ petitioner quarried for the contractual period. Though the respondent did not renew the contract, the writ petitioner filed a civil suit and on the basis of interim order, continued quarrying, to be noted, this is the admitted averment of the writ petitioner.
However, it is not necessary to go into that aspect of the matter as it may be outside the four corners of the captioned main writ petition. As far as the captioned main writ petition is concerned, the writ petitioner filed return of income for said AY on 13.09.2015 admitting an income of Rs.14,79,470/- and claimed a sum of Rs. 2,58,67,698/- which according to the writ petitioner is 5% increased value of granite for the period from 01.12.2008 to 31.03.2014. Thereafter, the case of the writ petitioner was selected for limited scrutiny inter alia under Section 143(2) of Income Tax Act by the first respondent. To be noted, this is to verify the genuineness of ‘other expenses’.
The division bench of Justice M.Sundar held that when the appeal remedy is available and there is nothing to demonstrate that it is not efficacious, in the light of the discussion and dispositive reasoning thus far, this Court has no hesitation in holding that this is a fit case for relegating the writ petitioner to the alternate remedy under Section 246-A of Income Tax Act. “The sequitur is captioned writ petition or in other words campaign against the impugned order in writ jurisdiction fails and the writ petition is dismissed, albeit, preserving the rights of the writ petitioner to prefer a statutory appeal inter alia under Section 246-A of Income Tax Act subject of course to limitation and pre-deposit condition, if any. If the writ petitioner files an appeal, as already alluded to supra, subject to limitation and subject to pre- deposit condition if any, the said appeal shall be considered on its own merits and in accordance with law by the appellate authority. It is also made clear that it is open to the writ petitioner to seek exclusion of time spent in the captioned writ petition under Section 14 of the Limitation Act and if the writ petitioner chooses to do so, the Appellate Authority shall decide the same on its own merits and in accordance with law,” the court said.
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The Telangana Authority of Advance Ruling (AAR) held that no GST on printing of pre-examination material for educational boards or Universities.
The applicant, M/s. Hitech Print Systems Limited is engaged in the business of printing high-security products and offering total solutions to customers in educational fields. The main product offered by the applicant are Bank Cheque Books, OMR Answer sheets, Certificates, Bank Memos, etc.,
The Advance Ruling Authority of Telangana in the case of M/s. KL Hitech Secure Print Limited their order No.10/2018, A.R.Com/13/2018, dated: 26-07-2018 have held that supply of service to education institution is eligible for exemption under Entry No.66 of Notification No.12 of 2017 – Central Tax (Rate) dt: 28-06-2017.
The applicant is desirous of obtaining clarification regarding the supply of OMR Answer Sheets, Certificates, Scanning services provided in connection with the conduct of examination by the educational institutions.
The applicant has sought the advance ruling on the issue Whether printing of pre-examination material items like Question Papers, OMR Sheets [Optical Mark Reading], Answer Booklets with/without OMR, Practical Answer Booklets, Hall Tickets and other examination material specific to various educational boards/Universities amounts to the provision of service and the same is exempt from GST levy.
Yet another issue raised was in respect of classification and applicable GST rate for the supply of cheque books printed in the name of specific Bank name and customer name as per the specification given by the Banks.
The coram of Raghu Kiran and S.V. Kasi Visweswar Rao held that printing of pre-examination material items like Question Papers, OMR Sheets [Optical Mark Reading], Answer Booklets with/without OMR, Practical Answer Booklets, Hall Tickets and other examination material specific to various educational boards/Universities amounts to the provision of service and the same is exempt from GST levy.
“Where the banker supplies the content and the applicant uses their own physical input, i.e., paper, then the case is covered under Heading 9989 (ii) of Notification No.11/2017-Central Tax (Rate), dated June 28, 2017, as amended and is taxable at 9% CGST & SGST Act each; and where the applicant uses physical input, i.e., paper supplied by their client then the same will fall under Heading 9988 (ii)(a) and is taxable at 6% under CGST & SGST each,” the AAR added.
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The Kerala High Court while disallowing the deduction to Oil Palm India held that agricultural income was excluded from the purview of the Central Act, not part of the computation of income under the Central Act.
The assessee, Oil Palm India is a company with the shareholding held by the Governments of India and Kerala. The appellant undertakes Oil Palm cultivation and manufacture and production of crude palm oil. The assessee, till the assessment year 2005-2006, has been paying returns under Act 1991 on the 100% income derived from the agriculture and business income from manufacture/production of crude palm oil. A controversy arose between the assessee and the revenue, with the revenue implementing Rule 7 of the Central Income Tax Rules, 1962 providing for the assessment of income which is partly agricultural and partly business income.
The Assessing Officer rejected deduction claimed by the assessee on the ground that the assessee has paid tax under Act 1991 on the whole of its income, whereas a part of income alone is amenable to the Agricultural Income Tax Act. The agricultural income is excluded from the purview of the Central Act and therefore is not part of the computation of income under the Central Act.
The division bench of Justice S.V.Bhatti and Justice Viju Abraham held that agricultural income does not form part of computation under Section 14 of the Act, 1991. Further, the deduction is envisaged for the purpose of ascertaining the net income of the assessee under different heads. The agricultural income is excluded and tapering into admissible tax, a deduction would again be inconsistent with Sections 10,14, and 43B of the Act. Clause-B of Section 43B deals with the tax payable by the assessee. The main fault under any law for the time being in force means the tax payable by the assessee for earning the income for which the computation is carried out.
The agricultural income tax paid for the apportioned agricultural income cannot overlap into the business income as tax payable by the assessee for earning business income. No reported judgment on this aspect of the matter is brought to our notice. Therefore from a plain and literal meaning of the applicable clause, the argument that the tax paid under Act 1991, ensures deduction is unsustainable and accordingly rejected.
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In a major relief to South Indian Bank, the Kerala High Court allowed the Income Tax Deduction on bad debts.
The Assessing Officer through the assessment order disallowed the claim of the assessee under Section 36(1)(viia). Similarly, the Assessing Officer disallowed the revaluation of unquoted securities adopted by the assessee. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) and the appeal was allowed in part. In the appeal filed by the Revenue before Income Tax Appellate Tribunal, through order, the Tribunal partly allowed the appeal for statistical purposes. Hence, the instant Income Tax Appeal, at the instance of the Revenue under Section 260A of the Income Tax Act. The questions of law relating to bad debts and provision for bad debts in rural branches of the assessee’s bank.
The issue raised was whether relevant provisions especially proviso to Section 36(1)(vii) cannot be the claim of the assessee for bad debts u/s 36(1)(vii), and the claim in the credit balance in the provision for bad and doubtful debts u/s. 36(1)(viia) be disallowed and whether the claim of bad debts and bad and doubtful debts is an allowable deduction.
The counsel appearing for parties state that the question concerning bad debts falling under Section 36(1)(vii) is covered in favor of the assessee in the reported judgment of the Supreme Court in Catholic Syrian Bank v. Commissioner of Income Tax and had answered the point in favor of the assessee and against the Revenue. The division bench of Justice S.V. Bhatti and Justice Bechu Kurian Thomas while relying on the decision of the Supreme Court in the case of Catholic Syrian Bank v. Commissioner of Income Tax allowed the appeals of the assessee and dismissed the appeals preferred by the revenue. Further, directed that all matters be remanded to the Assessment Officer for computation in accordance with the law.
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The Central Board of Direct Taxes (CBDT) has issued the Guidelines which states that no TDS under section 194-O of the Income Tax Act is required on E-Auction Services.
The Board has received representations from various stakeholders involved in the business of carrying out e-auction services through an electronic portal owned, operated, or maintained by e-auctioneer. It has been stated that in an e-auction, the e-auctioneer involved in conducting the e-auction through its portal is responsible only for the price discovery for the sale/purchase of goods or services and the result of the auction report is submitted to the client. The client could be the buyer or the seller. Participants in the auctions are sellers (if the client is the buyer) or buyers (if the client is the seller). The transaction of sale/purchase is being carried out directly between the buyer and the seller which is not done through the electronic portal of the e-auctioneer. Further, the price so discovered can be further negotiated between the parties without the knowledge of the e-auctioneer. In such a scenario, it has been represented that provisions of section 194-0 of the Act do not apply as the transaction of sale/purchase itself is not taking place through the electronic portal.
The e-auctioneer conducts e-auction services for its clients in its electronic portal and is responsible for the price discovery only which is reported to the client.
The price discovered through the e-auction process is not necessarily the price at which the transaction takes place and it is up to the discretion of the client to accept the price or to directly negotiate with the counterparty.
Sub-section (IA) of section 206C of the Act provides that notwithstanding anything contained in sub-section (I) of the said section, no tax is to be collected in case of a buyer, who is a resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration to the effect that the goods (as referred to in sub-section (I)) are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.
As per the provisions of sub-section (IH) of section 206C of the Act, tax is to be collected in respect of the sale of goods other than the goods which have not been covered under sub-section (I) or sub-section (IF) or sub-section (IG). It has been represented that in case of goods that are covered under the provisions of sub-section (I) of the said section but exempted under sub-section (IA), the tax will not be collectible under either sub-section (I) or sub-section (IH) of section 206C as the provisions of sub-section (IH) categorically exclude the goods which are covered under sub-section (I) of section 206C. It has been requested to clarify if the provisions of section 194Q of the Act will be applicable in such cases.
The issue has been examined. It is seen that the provisions of section 194Q of the Act do not apply in respect to those transactions where tax is collectible under section 206C [except sub-section (IH) thereof of the Act. Since by virtue of sub-section (IA) of section 206C of the Act, the tax is not required to be collected for goods covered under sub-section (I) of the said section, it is hereby clarified that in such cases, the provisions of section 194Q of the Act will apply and the buyer shall be liable to deduct tax under the said section if the conditions specified therein are fulfilled.
There have been representations from departments of the Government (both Central Government and State Government), to enquire if such a department is required to deduct tax under the provisions of section 194Q of the Act.
The Board has clarified that any other person, such as a Public sector Undertaking or corporation established under Central or Stale Act or any other such body, authority or entity, shall be required to comply with the provisions of section 194Q and tax shall be deducted accordingly.
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