Petition Challenging Treatment of Manpower Supply as ‘Inter-State’ or ‘Intra-State’: Rajasthan HC Seeks Response from Centre and State [Read Order]

Petition Challenging Treatment - Manpower Supply - Inter-State - Intra-State - Rajasthan HC - taxscan

The Rajasthan High Court has seeked response from centre and state, regarding the treatment of manpower supply while it was challenged in a petition.

The petitioner, Skylark Infra Engineering Private Limited, on the supply of the aforesaid manpower service, deposited 18% Integrated Goods and Services Tax (IGST) treating the aforesaid supply of manpower to be inter-state services, inasmuch as it had its office at Delhi/Gurgaon and the manpower was supplied at Jaipur in Rajasthan.

The petitioner was served with a show cause notice to show cause as to why a demand of CGST+RGST under Section 74 of the Goods and Services Tax Act, 2017 along with interest and penalty may not be raised against it.

The assessing officer and the first appellate authority had rejected the claims of the petitioner, holding against the contentions raised. Aggrieved petitioner approached the Rajasthan High Court by a civil writ petition in the absence of the Goods and Services Tax Tribunal.

The validity of Section 19(1) of the IGST Act, Section 77(1) of the CGST Act/RGST Act and Rule 89(1A) of the CGST Rules were challenged for being unconstitutional by the petitioner.

The Rajasthan High Court Bench of Justice Shubha Mehta and Justice Pankaj Mithal observed that “the petitioner cannot be compelled to pay tax on the services rendered by it twice”, granting interim relief to the petitioner. However, the petitioner was directed to deposit 65% of the demanded Goods and Services Tax (CGST and RGST) in preferring application for refund. It was also directed that the petitioner’s accounts that were attached to be released on the instance of receiving the application for refund.

Since the legal issues in dispute contained challenges to provisions in the Central and State Goods and Services Tax Acts, responses were seeked from the centre and state by the Rajasthan High Court Division Bench,

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