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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 whether DVDs containing case laws can be considered as “e-books” 42/2020-21

GST Update on whether DVDs containing case laws can be considered as “e-books” 42/2020-21

 

In this update we shall discuss a recent advance ruling pronounced by Tamil Nadu AAR in the case of VENBAKKAM COMMANDUR JANARDHAN, proprietor of M/s Law Weekly Journal on the issue whether the sale of DVD’s/CD’s containing the printed content in electronic form with a software to search and read in computers fall under the category of E-books so as to be eligible for the benefit of reduced GST rate of 5% in terms of serial no. 22 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 13/2018-C.T. (Rate) dated 26.07.2018.

The applicant supplies printed law journals and DVD’s of law journals. He seeks advance ruling with respect to the following four questions.

“1. Whether the assessee/dealer which publishes law journals in print and sells the same content that is in books in an electronic form in DVD’s/CD’s with a software to search and read it in computers and hand held devices come under the category of ‘E-book’, so that it can avail the benefit of notification dated 26.07.2018 in respect of E-book?

2. Whether the liability on the sale of DVD/pen drive which contains printed version of law citations can be adjusted against the available ITC?

3. Whether the liability on sale of e-book of printed version of law citation can be adjusted against the available ITC?

4. Whether the balance of ITC after adjustment accrued on the purchase of paper and other material can be reversed while filing GSTR 9?”

The AAR has answered the first question in negative stating that the supply of DVD containing content in electronic form does not fall under the category of E-books. This is for the reason that the DVD contains an executable file (setup) which is to be installed on the hard drive of the desktop/system. It was held that such DVD is not electronic version of the print journals as If it was an electronic version of the print journals, the DVD would have machine readable files in any format such as .doc, .txt, .pdf or any other readable files and not the executable file.

As DVD/CDs do not contain electronic versions of the journals but an executable software application and therefore do not fall under the meaning of ‘e-book’ given in the said entry. Moreover, it was concluded that this is case of composite supply wherein supply of DVD/CD/Dongal is loaded with software and license to use the software during the subscription period. Hence, DVD/CD/Dongal being ‘storage devices’ containing the software shall be considered as principal supply of goods. Consequently, the notification no. 11/2017-Central Tax (Rate) dated 28.06.2017 pertaining to services does not apply.

 

Moving on further to the next three question put forward before the Authority, it was ruled that since the AAR has authority only to discuss on the earmarked issues as stated in section 97(2) of the CGST Act, 2017, it is not possible to give ruling with respect to next 3 questions as it is out of their purview.

It is to be noted that the scope of advance ruling under section 97(2) of the CGST Act, 2017 is restrictive and many decisions have been reported wherein the advance rulings on issues concerning place of supply provisions, utilisation of input tax credit have been rejected merely by stating that the said issues are not withing their purview. However, the High Court has ordered against this view and held that the advance ruling can give verdict on place of supply provisions.  Therefore, government should think of increasing the ambit of advance rulings so that their very purpose of creation, being reduced litigation is achieved. Moreover, the GST law is at initial stage of implementation and interpretations may vary. As soon as the verdict of Apex Court, various High Courts and tribunals will come and law will settle down. But it will take time and till that time, consultants will have to work hard.

This is solely for educational purpose.

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