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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST Update on determination of place of supply in case of Ex - factory sales 55/2020-21

Since inception of GST Law, there was confusion as regards the determination of place of supply in case of ex-factory or ex-showroom sales wherein the transfer of property in goods is transferred at the factory gate or the showroom. However, it appears that the doubts prevailing in the minds of the assessee has been resolved by the recent Advance Ruling pronounced by Telangana AAR in the case of M/s PENNA CEMENT INDUSTRIES LTD. The issue before the Telangana AAR in this case was regarding what tax should be charged on ex-factory inter-state sales made by the applicant.
 
It is pertinent to refer to the provisions contained in section 10(1)(a) of the IGST Act, 2017, which reads as follows:-
10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––
 
(a) where the supply involves movement of goods, whether by the supplier or
the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;
 
The meaning of the phrase “ location of goods at the time at which movement of goods terminates for delivery to the recipient” is to be seen from the supplier’s perspective or the recipient’s perspective was not clear as both the perspective fetched different results. If the phrase was to be considered from supplier’s perspective, then the movement of goods terminates for delivery at the factory gate or showroom whereas if it is considered from the perspective of recipient, it is the place where goods are actually taken for consumption. This is for the reason that the starting language of the clause mentions that movement of goods can by either by supplier or the recipient or any other person. As there was no clarity regarding the point where movement of goods terminates, there was doubt regarding considering such transaction as inter-state or intra-state.
 
Consequently, the Telangana Advance Ruling seeks to resolve the doubt and rules that on careful appraisal of the provisions of section 10(1)(a), it is found that if in case of ex-factory sales, the recipient is engaged in movement of goods to another State, then in such case, movement of goods terminates at the place of destination where the goods are finally destined as per the billing address. This is for the reason that movement of goods can be either by the supplier or the recipient.  Accordingly, it is to be inferred that where supply involves movement of goods, whether by supplier or recipient or any other person, place of supply is to be determined with reference to the location where movement of goods is ultimately terminated.
 
To illustrate-if Mr. X having GST registration in Jodhpur (Rajasthan) purchases laptop from a Dell Showroom registered in Delhi, then in that case, even if the ownership of laptop is transferred at the showroom itself and the movement of laptop from showroom to Jodhpur is on account of Mr. X, the supplier will consider the transaction as inter-state transaction as place of supply in this case would be the place where movement of goods terminates being Jodhpur.
 
In our opinion, this advance ruling is in consonance with the provisions of GST Law on the following grounds:-
 
  1. Even if movement of laptop is on account of Mr. X, e-way bill needs to be generated if the value of laptop exceeds Rs. 50,000. Mr. X would generate e-way bill as citizen and this facility is available on e-way bill portal. This proves that movement of goods terminates at Jodhpur as the GST law necessitates generation of e-way bill in this case also.
  2. If the transaction is considered as inter-state transaction, the supplier will charge IGST and consequently, Mr. X, registered person will be able to avail input tax credit. However, if the transaction is considered as intra-state transaction, the supplier would charge CGST Delhi and SGST Delhi due to which Mr. X would not be able to claim input tax credit and such GST would become cost to Mr. X which is against the principle of seamless flow of input tax credit. It will lead to cascading effect which is not desirable.
  3. GST is consumption/destination based tax which entails that the SGST portion of the tax should accrue to the State where the goods and services are consumed. In the present case, if the transaction is considered as inter-state transaction, the SGST portion of the IGST would be given to Rajasthan Government which is correct as per the consumption based principle as the goods are ultimately consumed in the State of Rajasthan. If the transaction was considered as intra-state transaction, the SGST portion would have gone to Delhi where goods were not consumed and so it would be against the concept of destination based taxation.
 
In the GST regime, the decisions of Advance Rulings are generally pro-revenue but this decision is a boon for the assessees as it clarifies all the doubts regarding interpretation of section 10(1)(a) of the IGST Act, 2017.
 
This is solely for educational purpose.
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