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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 No 102 ON SCOPE OF AAR TO CONSIDER ISSUES RAISED

GST UPDATE No 102 ON SCOPE OF AAR TO CONSIDER ISSUES RAISED
A number of cases have been reported wherein the application for advance ruling has been rejected merely on the grounds that it is not covered within the scope of AAR to comment on the said issue according to provision contained in section 97 of the CGST Act, 2017. Reference may be made to the case of CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD [2021 (49) G.S.T.L. 41 (A.A.R. - GST - T.N.)] wherein the application of advance ruling was rejected without going into merits on the grounds that the applicant was recipient of service and not supplier of service. However, recently, an interesting case was reported in the case of KHAITAN CHEMICALS AND FERTILISER [ORDER NO. 18/2020 DATED 08.12.2020] wherein the AAR refused to pronounce ruling on the grounds that it is not competent to test the constitutional validity of the provisions contained in GST Law. The analysis of this decision is the subject matter of discussion of our present update. The applicant filed advance ruling under the section 97(2)(e) of the CGST Act, under category of “determination of liability to pay tax on any goods or services or both” wherein it was stated that the liability to pay GST on ocean freight in case of “CIF terms” under reverse charge mechanism amounts to double taxation as the applicant has paid IGST on import of goods including the value of freight but is made to pay GST again on ocean freight under reverse charge mechanism which is improper. However, the Madhya Pradesh AAR held that the true meaning of the category entails that AAR can only answer whether tax is payable on the transaction undertaken by the applicant but it cannot interpret the constitutional validity of the provision levying tax in a particular statue as it is the exclusive domain of the Courts. The AAR held that when the applicant himself admits that the liability to pay tax exists, the validity of the provision levying tax cannot be questioned before AAR. Moreover, the reliance placed on the decision rendered by Hon’ble Gujarat High Court in the case of Mohit Minerals declaring the provision for levy of tax on ocean freight under reverse charge mechanism on the grounds of double taxation as ultra vires was rejected to be of no help to the applicant in the present case. Hence, the application was rejected without going into the merits of the case as being outside the purview of the scope of AAR. In this context, it is worth noting that the above cited decision needs to be re-visited as there have been many decisions which have entertained interpretation of statutory provisions for determination of tax liability for the applicant. Reference may be made to the recent decision given by AAAR in the case of ROTARY CLUB OF MUMBAI NARIMAN POINT [2020 (34) G.S.T.L.335 (APP. A.A.R.- GST MAH.)] wherein the issue raised was taxability of subscription/membership amount collected by club to its members which is solely utilised towards various expenditure incurred in meetings and other administrative expenses. It was concluded that no GST would be payable on the said amount collected as membership subscription as it is purely in the nature of a reimbursement for the meetings and administrative expenditures incurred by the appellant to sustain and propagate their inherent objectives and programmes, and if GST is leviable, it would be subject to the double taxation as the amount spent towards the meetings and administrative expenditures is already subjected to GST at the hands of the suppliers of these input services orgoods used in the meetings, events and other administrative functions of the appellant. Thus, levying tax on such fees would clearly be against the Legislature’s intention of the formulation of GST, which certainly does not embrace the idea of double taxation. It is pertinent to mention that the dispute as regards taxability of membership fees collected by club from its members has been in dispute since erstwhile service tax regime wherein the concept of mutuality of interest is being propagated. The matter has even travelled upto Supreme Court with favourable decision for assessee. Hence, technically, the AAAR should have refrained from commenting on the said question raised before it but instead a favourable ruling has been pronounced by considering the pleading of double taxation. Therefore, it is practically impossible for the assessees to predict the response of their advance ruling application filed by them as far as the applicability of section 97 of the CGST Act prescribing scope of AAR is concerned. It is pertinent to mention that there have been cases wherein the advance rulings having reference of Place of Supply provisions have been rejected as being outside the ambit of advance ruling. However, certain advance rulings were pronounced even considering the Place of Supply provisions on the premise that it is essential factor for determining the liability to pay tax which is very well within the scope of advance ruling under section 97 of CGST Act. Hence, the tussle as regards whether the issue raised is within the scope of advance ruling is relative issue, depending on the facts and circumstances of case but with the competency of the applicant to convince that the issue falls under the categories mentioned in section 97, the decision may be obtained on merits.
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