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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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Exemption to supply received from Unregistered dealer

Exemption to supply received from Unregistered dealer

GST DAILY DOSE OF UPDATION

Exemption to supply received from Unregistered dealer

Reverse charge on purchase from unregistered dealer under section 9(4) of CGST Act, 2017 is the most dreaded provision of the GST law. Notification No.8/2017-Central Tax (Rate) dated 28th June, 2017 was issued to exempt the supply from unregistered supplier if the aggregate value of such supplies does not exceeds Rs. 5000/- per day. This Notification was effective as from 1.7.2017.
In the 22nd meeting of GST Council, it was decided to defer this provision till 31.3.2018. To give effect to this decision, Notification No. 38/2017 – Central Tax (Rate) dated 13th October, 2017 has been issued. This Notification amends the notification no. 8/2017-CT(Rate) as follows:-
"In the said notification, the proviso under Paragraph 1 shall be omitted.
2. The exemption contained in the notification No. 8/2017-Central Tax (Rate) dated the 28th June, 2017 as amended by this notification shall apply to all registered persons till the 31st day of March, 2018."
The proviso under paragraph 1 of notification no. 8/2017-CT(Rate) provided that the exemption was not available if the value of supply from unregistered dealer exceeds Rs. 5000/-. The amending notification 38/2017-CT(Rate) has a effect that:-
• The exemption contained in notification no. 8/2017-CT(Rate) is applicable to all the registered persons irrespective of the value of supply received from unregistered dealer.
• This exemption is available till 31.3.2018.
When this notification was issued, there were rumours that this notification has retrospective effect and no tax is to be paid right from 1st July, 2017. However, there is no such indication in the amending notification. The notification is said to be retrospective only if there is specific provision in that notification to give the retrospective effect. On the other hand, there is no such clause in the notification no. 38/2017-CT(Rate). The rumours were based on the fact that the original notification no. 8/2017-CT(Rate) was effective from 1.7.2017.

It is worthwhile to mention here that to check the retrospective effect or prospective effect, the language of amending notification is to be seen (which is notification no. 38/2017-CT(Rate) in the instant case. When this amending notification does not speaks of any retrospective effect, it cannot be given. This has been decided in a number of cases like GALAXY ORGANICS (P) LIMITED Versus UNION OF INDIA [2004 (177) E.L.T. 44 (Bom.)] and Z.A. ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT [1998 (101) E.L.T. 145 (Tribunal)]. In these cases, it was held that no retrospective effect could be given to an amendment unless the notification specifically provides for the same.
Therefore, since the amending notification does not specifically provides for the retrospective effect, it will be applicable prospectively. Accordingly, the supply from unregistered dealer will be out of purview of GST only w.e.f. 13.10.2017. For the period prior to this date, tax shall be required to be paid on the same.

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