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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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Update on grant of retrospective exemption from leviability of service tax on liquor license

Update on grant of retrospective exemption from leviability of service tax on liquor license
Update on grant of retrospective exemption from leviability of service tax on liquor license:-

Government vide Finance Bill has provided for retrospective exemption from service tax on service by way of grant of liquor licence. This implies that no Service tax shall be levied or collected in respect of taxable service provided or agreed to be provided by the state Government on the License Fee or the application fee charged during the period commencing from the 1st day of April, 2016 till 30th day of June, 2017.

Earlier there was a confusion about the leviability of Service Tax on Liquor license fees as itwas neither covered under negative list nor covered under the Mega Exemption Notification. Moreover, there was doubt that the said activity was statutory function of the government. Accordingly, service tax liability was raised on various assessees under reverse charge mechanism. In contrast, as per the provisions in the GST regime, it was found that the definition of supply given under section 7(1)(a) includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease of disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It is submitted that the definition of supply explicitly mentions license within its ambit and so it can be said that grant of license is liable to GST and that too, under reverse charge mechanism.
However, altogether different facts emerged as regards levy of GST on liquor license. The GST Council in its 26th meeting held on 10.3.2018, declared that:
(i) GST is not leviable on licences for alcoholic liquor for human consumption; and
(ii) This would also apply mutatis mutandis to the demands by service tax/Central Excise authorities of service tax on licences for alcoholic liquor for human consumption in the pre-GST era, i.e. from period 1st April 2016 to June 2017.
 
Thereafter, Haryana Government issued letter no. 8044/X-1 dated 10.03.2018 based on the decision of the GST Council Meeting that GST/service tax is not leviable on the grant of license for liquor. However, no notification was issued till date as regards non-levy of GST/service tax on the charges of liquor license and the assessees were in delimma whether GST/service tax was payable by them under reverse charge mechanism or not. But, the confusion of the assessees was cleared by the decision rendered by the Hon’ble Delhi High Court in the case of Jagatjit Industries Limited & ANR Vs Union of India & Others and Sabmiller India Limited & ANR Vs Union of India & Others in Writ Petition No. 3277/2017 & 4204/2017 wherein it was held that since the Central Government has accepted the decision of the GST Council as evidenced from the communication addressed to the Joint Commissioner (Legal) vide letter dated 31.07.2018, the challenge to the relevant provisions of law have been rendered as irrelevant. Therefore, the position as regards levy of service tax/GST on license fees was made clear which has now even being affirmed by the Finance Bill issued on 5th July 2019.
We had prepared an update on this issue wherein a confusion still persisted what will be the recourse available to the assessees who have concluded their cases by paying the applicable service tax along with interest and 15% penalty in the erstwhile regime? This has further being clarified in the Finance Bill where it states that Refund shall be made for all the Service Tax Collected , It has also been provided that the claim for refund shall be made within the period of 6 months from the date on which the Finance Bill receives the assent of the President.
This is solely for the educational purpose.
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