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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 LEVY OF GST ON CONTRIBUTIONS RECEIVED FROM MEMBERS OF SOCIETY 157/2020-21

GST UPDATE ON LEVY OF GST ON CONTRIBUTIONS RECEIVED FROM MEMBERS OF SOCIETY 157/2020-21
 Supply of goods and services by clubs, societies to its members has always been a matter of discussion as to the applicability of the principle of mutuality be it in the case of Income tax, sales tax or service tax. This dispute is even been carried forward to goods and service tax regime. In this update we shall be discussing the ruling pronounced by Maharashtra AAAR in the case of M/s Apsara Co-operative Housing Society Ltd.  M/s Apsara Co-Operative Housing Society is a Co-operative Housing Society, registered under the Maharashtra State Co-operative Society Act 1960. The main object as per the bye-laws are to obtain the conveyance from the promoter, to manage, maintain and administer the property of the society, to raise funds for achieving the objective of the society, to undertake and provide for, on its own account or jointly with Co-operative etc. For the purpose of obtaining the above objectives of the society, they raise funds by collecting contributions from the members of the Society, which are also called “charges” in terms of the bye-laws. The charges include property taxes, water charges, common electricity charges, contribution to repair and maintenance fund, contribution to the sinking fund, services charges, car parking charges, interest on the default charges, non-occupancy, insurance charges, etc. The AAR has passed the decision against the applicant wherein it was held that activities carried out by the Appellant would amount to supply in terms of Section 7(1)(a) of the CGST Act,2017 and accordingly would attract GST, as provided under Section 9 of the CGST Act,2017.
The following questions were put before the Maharashtra AAR
i) Whether the activities carried out by appellant would amount to supply and whether the same are liable to GST?
ii) Whether they are correctly discharging the GST liability, for which they provided the illustrative invoices raised on the members of the society?
Being aggrieved, the applicant filed an appeal before AAAR wherein the following contentions were submitted
a.     It is submitted that the ruling was passed without considering the judgement passed by Honourable Supreme court in the case of State of West Bengal Vs. Calcutta Club Limited.
b.     Further AAR have based their ruling on the basis of circulars and notifications issued by CBIC issued under GST.
c.      They are not carrying out any business as per Section 2(17) of CGST Act 2017 as the main objective is maintenance of society and is not engaged in any trade.
d.     Reliance has been placed by the applicant on the following cases pronounced by the Maharashtra AAAR
1)     M/s Lions Club of Poona Kothurd
2)     M/s Rotary club of Mumbai Western Elite.
In the above cases, it was asserted that the society charges which are meant toward meeting the administrative expenses of the society are similar to membership fees collected by the club and the same shall not be construed as “Consideration”. Therefore, society charges shall not be subject to GST.
e.     Reliance had also been placed on the favourable high court judgements which are as follows
1)     M/s Saturday Club Limited.
2)     M/s Sports Club of Gujarat Limited.
Maharashtra AAAR ruled that activities carried out by the appellant would amount to ‘Supply’ on the basis of the following
·         All the activities of Appellant would rightly get covered under the definition of term ‘business’ as provided under section 2(17)(e) of the CGST Act,2017, which unequivocally stipulates that provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members would be included under the meaning of the term business.
·         The term ‘service’ has been rendered a very wide connotation. It is clear that the activities undertaken by Appellant would rightly be covered under scope of the term ‘service’.
·         Since the Appellant is providing services to its members against the consideration named as ‘society charges’ in the course or furtherance of business, therefore, the activities would be construed as ‘supply’ in terms of Section 7(1)(a) of the CGST Act ,2017 , and accordingly will be liable for GST.
·         As regards the second question raised i.e. whether they are correctly discharging their GST liability, the AAAR agreed with ruling of AAR wherein they have held that it cannot be answered in terms of Section 97(2) of the CGST Act, on the premise that the AAR can only comment on the determination of the liability as to whether any supply of goods or services or both are liable for GST or otherwise but cannot comment on the computation or assessment of the tax liability.
The tussle regarding levy of tax on goods or services provided by club or society to its members is continuing in GST regime as well inspite of favourable decisions rendered by Supreme Court on the similar issue in the erstwhile regime. Nonetheless, it appears that the dispute will be settled by Supreme Court for provisions contained in GST regime as well.

This is solely for educational purpose.
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