Commission to Agents not subject to Service Tax in the absence of Service Provider and Consideration: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the commission to agents cannot be subject to service tax in the absence of service provider and the consideration.

The appellants are merchant exporter and engaged in export of textiles goods such as fabrics, scarves, sarees, dress materials etc. to various countries. During the course of scrutiny of Shipping bills, it is revealed that Appellant have shown the commission amount to the tune ranging from 11% to 12% paid to commission agent located outside the India. From the scrutiny of their export invoices, it is revealed that they were deducting the said commission amount from the gross value of their export goods to arrive the net value of export.

The department was of the view that the said commission shown in the shipping bills/ export invoices is nothing but commission paid to the commission agent towards export of goods, therefore said commission amount is chargeable to service tax under the head “Business Auxiliary Service.”

The bench comprising Mr. Ramesh Nair (Judicial Member) and Mr. Raju (Technical Member) observed that there is no commission agent exist who provided the service for export trading of the goods exported by the appellant.

“When no service provider is in existence it cannot be said that the appellant have received the commission agent service. Secondly, it is also fact that the appellant have not paid the commission to any person in the foreign country. Therefore, in absence of any consideration paid for the alleged commission agent services no service tax can be demanded. In the export invoice the appellant have deducted an amount in the nomenclature of commission from the gross sale price thus, the deduction was passed on to the buyer of export goods which is nothing but a discount given to the Foreign Buyers of the goods,” the bench said.

Quashing the demand order, the Tribunal held that “In the above facts we are of the view that neither any service provider exist nor was any consideration paid to any service provider. Therefore, the department’s contention is baseless and not sustainable. We find that the appellant without prejudice also argued that if at all it is considered as the service of commission agent since the same was used for export of goods then also it is not chargeable for service tax as per notification no.14/2004-ST 10.09.2004 and in support of the submission they relied upon the judgment in the case of Textyard International – 2015 (44) GSTL 284 (T) and Arvind A. Traders – 2016 (44) STR 264 (T). Though we find force in this submission also made by the appellant but since on the first issue itself we had decided the matter, we are not inclined to give finding on alternate submission discussed above.”

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

GST Evasion: Patiala House Court refuses Anticipatory Bail to Person accused of Creating Dummy Directors and Manufacturing, Supplying of Clandestine without Bill [Read Order]

The Patiala House Court has refused the  Anticipatory Bail to Person accused of Creating Dummy Directors and manufacturing, and supplying of clandestine without bill.

The applicant/accused, Krishnakant Pandey has submitted that the statements of the accused/applicant have already been recorded on various occasions, although, he has stated that the statements were recorded under such conditions, where the application/accused had no option but to sign the statements or to face immediate arrest.

The department on the other hand has submitted that the Agency is facing difficulty in conducting investigation in the present case as despite repeated notices, the employees, agents and the Directors of the accused company are not appearing or co-operating with the investigation. He has pointed out that the accused persons have admitted that the Directors on record are only dummy Directors and it was the accused persons who were running the business of the company.

Even the statement pointed out that all the business was being carried out on the instructions of the accused persons and money collected from the clandestine sale was paid to the accused persons directly. It was further pointed out that there is a web of small firms, which are also dealing with similar goods and articles and they are all owned by the applicants/accused persons and the whole network is used for clandestine manufacturing and supply of goods without there being any bill or invoice in this regard.

The ADJ Harjyot Singh Bhalla while dismissing the application ruled that the present case is of clandestine manufacturing and sale which is covered by Section 132 (1) (a). Although, the punishment and the status of the case has cognizable and non bailable is the same, the evidence of both category of cases would necessarily be different. In case of offence under sub Section (1) (b) & (c), the evidence would necessarily be documentary and also available in the form of returns submitted as they involve an element of filing of return. Whereas, Section 132 (1) (a). pertains to a situation where there may not be any bills or invoices and evidence would have to be mostly ocular. Considering that such evidence would have to be given by the employees and persons involved in the production, transportation and sale, in cases, it may be possible for the accused persons to yield influence which may hamper the investigation.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

More than 29.8 lakh Tax Audit Reports filed, says CBDT

More than 29.8 lakh major Tax Audit Reports (TARs) have been filed on the e-Filing portal of the Income Tax Department as on 15th February, 2022. On the last day, over 4.14 lakh major Tax Audit Reports/forms have been filed.

Out of 29.8 lakh of the major statutory forms, over 2.65 lakh Form 3CA-3CD and around 24.5 lakh Form 3CB-3CD have been filed in FY 21-22. More than 2.71 lakh other Tax Audit Reports (Form 10B, 29B, 29C, 3CEB, 10CCB, 10 BB) have been filed till 15.02.2022.

On 15.02.2022, 34,842 Form 3CA-3CD (out of total of 2,65,153), 3,36,842 Form 3CB-3CD (out of total of 24,48,950), 18,644 Form 10B (out of total of 1,50,950), 11,852 Form 29B (out of total of 74,923), 478 Form 29C (out of total of 2,820), 10,542 Form 3CEB (out of total of 33,345), 873 of Form 10CCB (out of total of 4,904) and 570 of Form 10BB (out of total of 3851) have been filed. On the last date i.e. the extended due date of 15.02.2022, 14% of these statutory forms and in the last 5 days from 11.02.2022 to 15.02.2022, 30% of these statutory forms were filed.

Further, more than 5.41 crore Income Tax Returns (ITRs) filed have been verified out of 6.26 crore ITRs filed for AY 2021-22. Of the verified ITRs, more than 4.50 crore ITRs have been processed and 1.58 crore refunds for AY 2021-22 have been issued.

The Department expresses gratitude to all tax professionals and taxpayers for the support in compliances and requests the attention of taxpayers who are yet to accept the Tax Audit Report submitted by their CA to complete the process of submission.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

GST Evasion: CGST Navi Mumbai busts fake Input Tax Credit racket of about Rs. 21 cr

CGST Commissionerate, Navi Mumbai has busted a fake ITC racket of about Rs. 21 crores and arrested the proprietor of M/s. Shree Ram Enterprise (GSTIN: 27FPAPS4153A1Z3) today. The firm was engaged in availing, utilizing and passing on a fraudulent Input Tax Credit (ITC) on the bogus invoices of around Rs. 100 Crores thereby defrauding the government exchequer.

A team of officers of Anti-Evasion, CGST, Navi Mumbai conducted enquiry against the aforesaid firm. As per the statement of the proprietor, the said firm is involved in trade of scrap of ferrous and other metals. However, the investigation revealed that the taxpayer has availed and passed on fraudulent ITC from various non-existing/bogus firms.  The accused has been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) and (c) of the said Act and was produced before the Judicial Magistrate First class, Vashi at Belapur on 16.02.2022 and has been sent on judicial custody for 14 days.

This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the fraudsters and tax evaders who are creating unhealthy competition for compliant taxpayers and defrauding the Government exchequer. As a part of this drive, Navi Mumbai Commissionerate has detected tax evasion of about Rs 500 Crore, recovered Rs. 20 crores and arrested 13 persons recently.

The CGST Department is using data analysis tools to identify tax evaders. By using data analysis and network analysis, the officers of CGST Mumbai zone have booked more than 625 tax evasion cases, detected tax evasion of Rs. 5500 Crore, recovered Rs. 630 Crore and arrested more than 50 persons, in the last five months.

The CGST department is going to intensify the drive against the fraudsters and tax evaders, who are causing conditions of unfair competition with honest taxpayers and defrauding the government exchequer of its rightful revenue.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

R&D Activity in Biotechnology Services would be treated as ‘Computer Software’: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Bangalore has held that the R&D activity in biotechnology services shall be treated as “computer software” for the purpose of allowing benefit of section 10B of the Income Tax Act, 1961. The assessee is engaged in the business of undertaking R&D activity in biotechnology. The Principal CIT, while invoking…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

Around 6.2 cr Income Tax Returns & about 21 lakh major Tax Audit Reports filed, Two New Email ids for TAR grievance

The Income Tax Department has notified that Around 6.2 crore ITRs & about 21 lakh major TARs filed on the new e-filing portal of ITD.

More than 6.2 crore Income Tax Returns(ITRs) and about 21 lakh major Tax Audit Reports(TARS) have been filed on the new e-filing portal of the Income Tax Department as of 10th February 2022.

Out of 6.2 crore ITRS filed for AY 2021-22, 48% of these are ITR-1 (2.97 crore), 9% is ITR-2 (56 lakh), 13% is ITR-3 (83 lakh), 27% are ITR-4 (1.66 crore), ITR-5 (11.3 lakh), ITR-6 (5.2 lakh) and ITR-7 (1.41 lakh).

Over 1.91 lakh Form 3CA-3CD and 17.26 lakh Form 3CB-3CD have been filed in FY 21-22. More than 1.84 lakh other Tax Audit Reports (Form 10B, 29B, 29C, 3CEB, 10CCB, 10 BB) have been filed till 10.02.2022.

The Department has been issuing reminders to taxpayers through emails, SMS, and Twitter encouraging taxpayers and Chartered Accountants not to wait till the last minute and file their TARS/ITRs without further delay.

Further, to assist the filers for resolution of any grievance related to e-filing, two new email ids TAR helpdesk@incometax.gov.in and ITR.helpdesk@incometax.gov.in have been provided. All taxpayers/tax professionals who are yet to file their Tax Audit Reports or Income Tax Returns for AY 2021-22 are requested to file their TARs/Returns immediately to avoid the last-minute rush.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Supply of Mobile Gensets constitutes Sale of Goods, Service Tax not Leviable: CESTAT [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi bench has held that the service tax cannot be levied on the supply of gensets since the same constitutes the sale of goods within the meaning of the Article 266(29A) of the Constitution of India.

The appellants are engaged in the business of supply generator sets on a rental basis to their clients. The department was of the view that the appellants shall pay service tax on such receipts.

The appellant had contended that supply of gensets made by them, in both the manners, was governed under the provisions of VAT or Sales Tax considering the same as ‘deemed sales’ and paid VAT/Sales Tax on the consideration charged by him, as the effective control and possession of gensets was with clients. Such supply of gensets was ‘deemed sales’ in terms of Article 366(29A) of the Constitution of India read with Sales Tax Laws, accordingly VAT/Sales Tax was paid on the consideration received by the appellant.

The Tribunal bench comprising Judicial Member Mr. Anil Chaudhary and Technical Member Mr. C J Mathew found that for the period 01.07.2012 to 31.01.2016, the activity of the appellant i.e. supply of generators alongwith transfer of right to use and effective control & possession cannot be covered under-declared service as provided under Section 66E(f) of the Act. Further, the said activity has also been excluded from the definition of ‘service’ as defined under Section 65B(44) of the Act. Hence, service tax demand for the said period is also not sustainable and is liable to be set aside.

“That the appellant is paying VAT on the amount received from clients for the supply of D.G. sets. Thus, the imposition of service tax on the same transaction is contrary to law as it is a settled law that VAT and service tax are mutually exclusive. Therefore, on a particular transaction either VAT or service tax can be levied,” the Tribunal said.

“The CBEC vide Circular No. 198/08/2016-SERVICE TAX, Dated: August 17, 2016, has provided that in order to distinguish such transactions as the sale of goods or supply of services, it is essential to determine whether, in terms of the contract, there is a transfer of the right to use the goods. Since the supply of the gensets meets the criteria mentioned by the Apex Court, we consider the supply of gensets is the sale of goods in terms of Article 266(29A) of the Constitution of India,” the Tribunal added.

CA Abhinav Kalra appeared for the petitioner.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Service Tax can’t be levied on Container Detention Charges and Toll Tax: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench has held that the service tax cannot be levied on container detention charges and toll tax. The appellant is a multi-modal goods transporter under the Multi-modal Goods Transport Act, 1993. For the relevant period, the service tax department demanded asked the appellants to pay…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

CA Professional Misconduct: ICAI finds 4 Chartered Accountants Guilty [Read Notifications]

The Institute of Chartered Accountants of India (ICAI) has notified the 4 Chartered Accountants guilty of Professional Misconduct.

In terms of the provisions of Section 21B(3) of the Chartered Accountants Act, 1949 read with Rules 18(17) and 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee has held CA. Anand Mallikarjun Ukamanal (Membership No. 130139), guilty of Professional Misconduct falling within the meaning of Items (5),(6),(7) & (8) of Part I of Second Schedule to the aforesaid Act and consequently ordered for the removal of the name of CA. Anand Mallikarjun Ukamanal (Membership No. 130139) from the Register of Members for a period of 02(Two) years and also imposed a fine of Rs. 50,000/- to be paid within 3 months and in case of default in payment of fine within stipulated time his name be removed for additional 1 month.

Since the Respondent has already paid the imposed fine within stipulated time, in pursuance of the aforesaid Order of the Disciplinary Committee and in exercise of the powers conferred by sub-section (2) of Section 20 of the aforesaid Act, read with Regulation 18 of the Chartered Accountants Regulations, 1988, it is hereby notified that the name of said CA. Anand Mallikarjun Ukamanal (Membership No. 130139), shall stand removed from the Register of Members for a period of 02(Two) years with effect from 4th February, 2022.

CA. N Basker (Membership No. 207226) was found guilty of Professional Misconduct falling within the meaning of Clauses (6) and (7) of Part I of Second Schedule to the aforesaid Act and consequently ordered for removal of name of CA. N Basker (Membership No. 207226) from the Register of Members for a period of 01 months and also imposed a fine of Rs. 25,000/- to be paid within a period of 3 (three) months and in case of default in payment of the fine within the stipulated time, his name be removed for an additional period of 1month.

CA. Ramachandran K K (Membership No. 021175) was found guilty of Professional Misconduct falling within the meaning of Clauses (7) & (8) of Part I of the Second Schedule to the aforesaid Act and consequently ordered for the removal of the name of aforesaid CA. Ramachandran K K(Membership No. 021175) from the Register of Members for a period of 01 months and also imposed a fine of Rs. 25,000/- only. The Respondent has already paid a fine and the Order of the Disciplinary Committee is also upheld by the Appellate Authority vide judgement pronounced on 1st January, 2022.

CA. Saikat Datta (Membership No. 062248), 33, Office Lane, AGARTALA-799 001(Tripura), guilty of Professional/Other Misconduct falling within the meaning of Clause (9) of Part I and Clause (2) of Part IV of the First Schedule and Clause (7) of Part I of the Second Schedule to the aforesaid Act and consequently ordered for removal of the name of aforesaid CA. Saikat Datta (Membership No. 062248) from the Register of Members for a period of 03(Three) months.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

MCA appoints Praveen Kumar as Director General & CEO in the Indian Institute of Corporate Affairs [Read Notification]

The Ministry of Corporate Affairs (MCA) has appointed Praveen Kumar as Director General & Chief Executive Officer in the Indian Institute of Corporate Affairs.

“In exercise of powers conferred by sub-rule (iii) of Rule 7 of the Indian Institute of Corporate Affairs Society Rules, the Central Government hereby appoints Shri Praveen Kumar, IAS (TN:1987) (Retd.) as Director General & Chief Executive Officer in the Indian Institute of Corporate Affairs with effect from the afternoon of 30th December 2021 for a period of 5 years or till attaining the age of 65 years or until further orders, whichever is earlier,” the MCA notified.

Praveen Kumar is a 1987 batch retired IAS officer of Tamil Nadu cadre, and a former Secretary of Skill Development & Entrepreneurship.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Govt. notifies Valuation of Tobacco and Tobacco products for purposes of payment of BCD, NCCD [Read Circular]

The Government has notified the valuation of tobacco and tobacco products for purposes of payment of Basic Excise Duty, and National Calamity Contingent Duty (NCCD).

“Representations have been received seeking clarification on the manner of computation of valuation, after the admissible abatement, for the purposes of computation and payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD). It has been argued that on the calculation of excise duty and NCCD on the value arrived at after abatement on the retail sale price and thereafter computing Goods and Services Tax (GST) on such value inclusive of the excise duty and NCCD results in the total retail sale price of such tobacco and tobacco products overshooting the declared retail sale price, and accordingly, the rate of abatement is being questioned citing the increase in NCCD rates in the year 2020,” the government said.

As per section 4A of the Central Excise Act, 1944, retail sale price based assessment has been prescribed for tobacco and tobacco products (like chewing tobacco, preparations containing chewing tobacco, Jarda scented tobacco, Pan masala containing tobacco) and abatement of 55% on the retail sale price has been prescribed for such products. Accordingly, assuming the retail sale price to be Rs. 100, the basic excise duty and NCCD are computable on an assessable value of Rs 45. The cumulative basic excise duty (@0.5%) and NCCD combined being 25.5%, at present, on such products, the amount of excise duty and NCCD payable would be Rs 11.475. It may be noted that the abated value of Rs 45, in this case, is a prescribed value for the computation of basic excise duty and NCCD. It is not the prescribed sale price by the manufacturer. He is free to maintain his sale price, as appropriate, taking into account the relevant factors of costing and profit.

Also, the abated value of Rs 45 (used only as a measure for computation of basic excise duty and NCCD) is not relevant for the computation of GST and Compensation Cess. Under the respective Acts, GST and Compensation Cess is payable on transaction value, that is the price actually paid or payable for the supply of goods including duties like basic excise duty and NCCD.

The value for the purposes of GST computation will be the transaction value plus basic excise duty, NCCD, and any other amount as prescribed in section 15 of GST Act, 2017 [i.e., in the above example, Value for computation of GST and Compensation Cess “V” = Transaction value as per the GST Act, 2017 + 11.475 (basic excise duty +NCCD)]. Hence, consequent to an increase in NCCD rate (like in the year 2020), a manufacturer of tobacco products had the option to raise his retail sale price so as to retain the transaction value at a level that he wishes to recover from the consumer. Accordingly, in a regular transaction, at arm’s length, the sale price of tobacco products would value “V” plus GST and compensation cess. It is normally anticipated that the tax and duty increase, including excise duty and NCCD, would lead to an increase in sale price.

The present mechanism of retail sale price-based assessment of basic excise duty and NCCD, as provided under section 4A of the Central Excise Act, 1944, does not pose any difficulty in assessment either of basic excise duty/NCCD or of GST/Compensation cess.

Further, the issue has been raised that notification No. 49/2008-Central Excise (N.T.), dated 24.12.2008, continues to contain a reference to the First Schedule to the Central Excise Tariff Act, 1985, even though the said Tariff Act has been repealed on the introduction of GST. It is argued that this is a legal infirmity. In this context, it is to state that been inserted in the Central Excise Act, 1944, meant for saving of references to Chapter, vide section 10 of the Taxation Laws (Amendment) Act, 2017 (18 of 2017), a section 38B has heading, subheading, and tariff item in Central Excise Tariff Act, 1985.

The relevant section is reproduced as under, “Notwithstanding the repeal of the Central Excise Tariff Act, 1985 by sub-section (1) of section 174 of the Central Goods and Services Tax Act, 2017, any reference to the Chapter, heading, sub-heading or tariff item, as the case may be, in the First Schedule to the said Act or in any rules or regulations made thereunder, or in any notification, circular, order or instruction issued thereunder shall mean a reference to the Chapter, heading, sub-heading or tariff item, as the case may be, in the Fourth Schedule.”

Hence, there has been no legal infirmity in notification No. 49/2008-Central Excise (N.T.) dated 24.12.2008, as amended, in continuing with a reference to the First Schedule of the Central Excise Tariff Act, 1985.

Accordingly, it is directed to ensure that the valuation of the tobacco and tobacco products, as provided under the relevant notification(s), with reference to retail sale price declared on such goods less such amount of abatement as is notified, is done for the levy and collection of the basic excise duty and NCCD on such goods, as detailed above.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

No Disallowance of Interest Expenses if Investment was made to acquire controlling interest: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that no disallowance can be made for interest expenses if the investment was made to acquire the controlling interest in the company. The assessee is a private limited company and engaged in the business of trading as well as indenting agents and providing consultancy services….

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

Income Tax Department can’t carry out any Assessment of Corporate Debtor for the Period Covered by the Resolution Plan: Telangana HC [Read Judgment]

The Telangana High Court has held that the income tax department cannot carry out any assessment of Corporate Debtors for the Period Covered By the Resolution Plan. The petitioner, Sirpur Paper Mills Limited has sought the quashing of notices dated 22.09.2019, 21.10.2019 and 30.10.2019 issued by respondent for the assessment year 2017-18 as being illegal…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

Budget 2022 to be presented on 1st Feb, 2022 in Paperless Form

The Union Budget 2022-23 is to be presented by the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on 1st February 2022 in Paperless form.

To mark the final stage of the Union Budget-making process, sweets were provided to the core staff due to undergo “lock-in” at their workplaces, instead of a customary Halwa ceremony every year in view of the prevailing pandemic situation and the need to observe health safety protocols.

To maintain the secrecy of the Budget, there is a “lock-in” of the officials involved in making the Budget. Budget Press, situated inside North Block, houses all officials in the period leading up to the presentation of the Union Budget. These officers and staff will come in contact with their near and dear ones only after the Budget is presented by the Union Finance Minister in the Parliament.

In a historic move, the Union Budget of 2021-22 was delivered in paperless form for the first time. A “Union Budget Mobile App” was also launched for hassle-free access of Budget documents by Members of Parliament (MPs) and the general public. The Union Budget 2022-23 would also be available on the Mobile App after the process of Budget presentation has been completed on 1st February 2022 in the Parliament.

The mobile App allows complete access to 14 Union Budget documents, including the Budget Speech, Annual Financial Statement (commonly known as Budget), Demand for Grants (DG), Finance Bill, etc. as prescribed by the Constitution. The mobile app is bilingual (English & Hindi) and is available on both Android and iOS platforms.

The App can also be downloaded from the Union Budget Web Portal (www.indiabudget.gov.in). The budget documents will also be available for download by the general public on Union Budget Web Portal (www.indiabudget.gov.in).

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

No Service Tax on Flats handed over to Existing Members of Societies without any consideration Once Tax Liability on gross consideration is discharged: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench has held that no Service Tax on flats handed over to existing members of societies without any consideration Once tax liability on gross consideration is discharged.

The respondent, M/s. Ethics Infra Development Pvt. Ltd. is providing the taxable services under the category of “Construction of residential complex” as defined by Section 65(105) (zzzh) of the Finance Act, 1994 as amended. During the course of the audit, it is noticed that appellant has provided the services of “construction of residential complex services” to Borivali Ashwini Co-op Housing Society Ltd.

The complete service tax liability was discharged on the gross amount received by him for providing the taxable services. Once he have discharged the tax liability on the gross consideration received by him by the sale of flats to new buyers, the demand of service tax for the

The coram of Judicial Member, Dr. Suvendu Kumar Pati and Technical Member Sanjiv Srivastava have noted that the gross amount charged by the builder is liable to tax. The said instructions are in force till today and have not been withdrawn by the Board. As already detailed herein above, the appellant has discharged the service tax liability on the gross amount charged i.e. consideration received from land owners in the form of kind other than cash (value of the land/development rights) + consideration received from prospective buyers in cash by way of financial arrangements on the construction services undertaken by the appellant on joint development basis.

“We also note that appellant had declared the same in the books of account like IT returns and ST-3 returns which has been certified by Chartered Accountant wherein it is stated that service tax compliance is towards the payment of gross amount of the construction undertaken on joint development basis and received from the customers has been made. This leads to conclusion that it is evident that appellant has complied with the service tax liability on the construction undertaken on joint development basis on the value of construction which is mandated in Section 67 of Finance Act, 1994, read with rules made thereunder. In our view, if once the service tax liability has been discharged on the gross amount, demand of service tax on the same amount again would amount to double taxation,” the CESTAT said.

The Tribunal while dismissing the appeal of the revenue said that in the peculiar facts and circumstances of this case, it cannot be held that there was a mala fide intention on the part of the appellant to suppress any facts or make misstatements, with an intention to evade service tax liability. Accordingly, we hold that demands are also hit by limitation and extended periods cannot be invoked for the demands received.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

ITAT rejects Revised Income Tax Return filed by Practicing CA declaring Income from Trading Business, Suspects attempt to cover up Queries on Cash Deposits [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal, on Wednesday rejected a revised return filed by a practicing Chartered Accountant claiming Trading Business as the source of cash deposits made with various bank accounts. The Tribunal bench comprising Accountant Member Mr. N K Billaiyya and Judicial Member Mr. C N Prasad expressed an opinion…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

Govt. extends Validation date of existing Registered Enterprises under MSME [Read Notification]

The Ministry of Micro, Small, and Medium Enterprises (MSME) has notified the extension of the date of validation of existing registered enterprises under MSME till March 31, 2022.

In exercise of the powers conferred by sub-sections (1) and (9) of section 7 read with sub-sections (2) and (3) of section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), the Central Government hereby makes the amendments in the notification of Government of India, Ministry of Micro, Small and Medium Enterprises number S.O. 2119 (E), dated the 26th June, 2020, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii).

“In the said notification, in paragraph (7), in sub-paragraph (3), for the figures and words, “31st day of March, 2021” the figures and words, “ 31st day of March, 2022” shall be substituted,” the government notified.

The Ministry of MSME vide Notification No. S.O. 278(E) dated January 19, 2022, issued amendments in its earlier issued Notification No. S.O. 2119 (E), dated June 26, 2020, notified the criteria for classifying the enterprises as Micro, Small, And Medium Enterprises (MSME) and specified the form and procedure for filing the memorandum in order to extend the date of validation of the existing enterprises registered prior to June 30, 2020, under the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) from March 31, 2021, to March 31, 2022.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Uttarakhand HC stays condition in GST Circular relating to Filing of Refunds in Chronological Order [Read Order]

The Uttarakhand High Court has stayed the condition in the GST Circular relating to filing of refunds in  chronological order. The petitioner has prayed to issue a writ of Certiorari quashing the impugned order and also to issue a writ of Mandamus commanding the respondent not to take any action against the petitioner regarding the…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

Madras HC directs Taxpayer to request Customer to issue appropriate Credit Notes to neutralise alleged excess GST Payment as Litigation is barred by Limitation [Read Order]

The Madras High Court has  directed the taxpayer to request customers to issue appropriate credit notes to neutralise alleged excess GST payment as litigation is barred by Limitation. It is the case of the petitioner, Quest Global Engineering Services Private Limited, that the Transferor Company namely the Quest Global Engineering Private Limited stood merged with…

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Why should you subscribe?
  • Enjoy our website without interruptions from advertisements
  • Receive Daily newsletters
  • Receive realtime Telegram/Whatsapp news updates
  • Download original Judgements / Order / Notifications / Circulars, etc
  • Enjoy exclusive entry fees to Simplified series. (Webinars, Seminars, masterclasses, etc.)
  ₹1199 + GST for 1 year

Subscribe Now

No GST on Services rendered towards Handling of Dhothies & Sarees, School Uniforms from Co-op Societies to PDS: AAR [Read Order]

The Tamil Nadu Authority of Advance Ruling (AAR) held that no GST on services rendered towards handling of Dhothies & Sarees, School Uniforms from Co-operative Societies to Public Distribution System.

The applicants have contended that they have been appointed and acting as a Nodal Agency to inspect and procure Cost Free Distribution Sarees & Dhothies and Cost-Free School Uniform under Government Flagship Schemes. The Cost-Free Distribution of Sarees and Dhothies Scheme was introduced during the year 1983 as one of the flagship schemes by the Government of Tamil Nadu. This scheme has been continued by the Government of Tamil Nadu with the twin objectives of providing continuous employment to 14,000 handloom weavers and 54,000 Power loom weavers in the State and for distribution of Sarees and Dhothies to the poor people living in rural and urban areas in Tamil Nadu. For Pongal 2021, 167.39 lakh Sarees and 167.29 lakh Dhothies were procured from Weavers Co-operative Societies at a cost of Rs. 484.25 crore and dispatched to all the Taluks of Tamil Nadu for onward distribution to the beneficiaries on the eve of Pongal every year.

The applicant has sought the advance ruling on the issue of whether the claim of expenses incurred to handle the Cost Free Distribution Sarees & Dhothies and Cost-Free School Uniform Scheme and supply to Revenue Department/Social Welfare Department will attract 18% GST or not.

The coram of K.Latha and T.G.Venkatesh held that the services rendered by the applicant towards handling of Dhothies & Sarees/ School Uniforms from Co-operative Societies to Public Distribution System / Revenue Department are exempted from payment of GST as per serial number 3 of the table given in GST Notification No. 12/ 2017 – Central Tax (Rate) Dated: 28.06.2017 as amended read with SI. No. 3 of Annexure to notification Ms. No. 72/2017 dated 29.06.2017

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

5% GST on Marine Engines and Spare Parts: AAR [Read Order]

The Tamil Nadu Authority of Advance Ruling (AAR) held that 5% GST on marine engines and spare parts.

The applicant has stated that they are importing outboard motors from Japan and selling the outboard motors to Fishermen, Boatbuilders, Defence Department and other agencies to fit in boats used for fishing purposes, patrolling, flood relief and rescue operations. They are also providing repairs and maintenance service for outboard motors, selling spare parts of marine engines, importing fishing hooks, agricultural equipment and motorcycle transmission chain sprockets and selling the same all over markets in India.

The applicant has stated that the outboard motors are designed to operate only in marine and fresh water and they can be operated only by fitting in a boat. The cooling system of the outboard motor is designed to take water through the propellers and hence the engine cannot be operated out of water. (Water-cooled engine not air-cooled). They have stated that the outboard motor cannot be utilized unless otherwise fitted on the boat, even for doing service they need to put it into a water tank to attend to the repairs and maintenance.

The applicant has sought the advance ruling on the issue Applicability of GST rate on marine engines pertaining to HS code 8407 and its spare parts without considering its general tax rate as per the entry of Schedule I, Sl.No.252 of GST Act dated 28.06.2017, being this engine forms a part of a fishing vessel of HS code 8902 and Applicability of GST rate 5% on marine engines pertaining to HS code 8407 and its spare parts without considering its general tax rate as per the entry of Schedule I, Sl.No.252 of GST Act dated 28.06.2017, being this engine forms a part of boats of HS code 8906 being supplied to defence department and other agencies used for patrolling/flood relief and rescue purposes.

The coram of K.Latha and T.G.Venkatesh ruled that applicability of GST Rate 5% on marine engines pertaining to HS code 8407 forming part of fishing vessels is not answered for lack of substantiating documents.

“Applicability of GST rate 5% on marine engines pertaining to HS code without considering its general tax rate as per the entry of Schedule I, SI. No.252 of GST Act dated 28.06.2017, being this engine forms a part of boats of HS code 8906 being supplied to defence department and Naval base, Cochin is available to the applicant when such engines are fit in vessels used for patrolling/flood relief and rescue purposes. Applicability of GST rate at 5% under SI.no.252 cited above is not available for spare parts of marine engines,” the AAR said.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.