Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
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.  

Comments
Print   |    |  Comment

PJ/Case Law/2020-2021/3576

Whether ancillary services provided along with the transmission of electricity be exempt from tax treating them as Composite supply?
M/s Chamundeshwari Electricity Supply Corporation Limited (Karnataka AAR)-Advance Ruling No. KAR ADRG 22/2020, Dated 23.04.2020
Brief Facts:  M/s Chamundeshwari Electricity Supply Corporation Limited is engaged in distribution of electricity. They procure power from various industries, individuals and also procure from solar power generators. They supply and distribute power to various consumers and further apart from transmission of electricity they render ancillary services.
Issue:Whether ancillary services provided along with the transmission of electricity be exempt from tax treating them as Composite supply?
Applicant’s Contention:  The applicant has  stated that Intra and interstate supply of Electrical energy is goods being exempted from the payment of taxes as per entry number 104 and Chapter Heading 2716 00 00 of the notification number 2/2017-Central Tax (Rate) dated 28-06-2017 . They also stated that Transmission or distribution of electricity by an electricity transmission or distribution utility being exempted from payment of taxes as per entry number 25 of the notification number 12/2017-Central Tax (Rate) dated 28-06-2017. The applicant has further stated the definition of Composite supply under section 2(30) of CGST Act, therefore, the principal supply is distribution and transmission of electricity to the end-user and hence, ancillary charges associated with supply transaction is being exempted from GST.
The applicant has placed reliance on the following judgements wherein Deeming provision is intended to enlarge the meaning of a particular word or to include matters which otherwise may or may not fall within the main provisions.
  1. Doypack Systems (Pvt) Ltd. Vs. Union of India [1988 (36) ELT 201 (SC)],
  2. Oswal Agro Mills Ltd Vs. Collector of Central Excise [1993 (66) ELT 37 (SC)]
Further reliance has been placed on the recent judgement rendered by Gujarat High court in the matter of Torrent Power Ltd. wherein verdict has been passed in favour of the applicant and issued judgement against the Circular No. 34/8/2018-GST with regards to taxability of charges recovered for the activities directly connected with the distribution and transmission of electricity such as application fee, meter rent, testing fee, labour charges for shifting meters and shifting of service line, etc.
Reasoning of Judgement: Circular no. 34/8/2018-GST dated 01.03.2018 has been stated wherein it was clarifies that the other services such as meter rent, application fees, testing fees for meters etc. provided by companies to consumers are taxable. And the same contention as in the circular was upheld by Rajasthan AAR in the case of M/s TP Ajmer Distribution Limited vide RAJ/AAR/2018-19/AR-02 dated dated 11-05-2018.
It has been stated that the department has filed special leave petition vide Diary No(s). 24733/2019 dated 09-08-2019 in the Honourable Supreme Court against the order passed by Honourable High court of Karnataka in the case of M/s Torrent Power Limited of Gujarat High Court vide Special Civil Application NO. 5343 of 2018 dated 05-04-2018 is at present pending for the decision.
So ruling passed by the authorities is that
“The issue of the exemption activities carried out by the applicant with reference to administration and Pre and Post connection charges towards supply of Electricity is pending before Honourable Supreme court of India Vide SLP Diary No.’s 24733/2019 dated 09.08.2019. Since the matter is Sub-judice therefore advance ruling on aforesaid issue cannot be given.”
Comment:-As per definition of “composite supply”, it can be inferred that it is combination of two or more taxable supplies and the combination should not include exempt supplies. However, it is pertinent to mention that the government itself has clarified vide Circular No. 32/06/2018-GST dated 12.02.2018 that food supplied to in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare services and not separately taxable. The above clarification indicates that the composite supply can be combination of exempt and taxable supplies as well.
Moreover, it has been consistently been held by various Advance Ruling Authorities that health care services provided in package including stay facility, medicines, surgical implants, food etc. is composite supply wherein principal supply is that of health care services which is exempt from GST. Reliance may be placed on the decision given in the case of CMC VELLORE ASSOCIATION [2020 (32) G.S.T.L. 601 (A.A.R.-GST-TN] and BABY MEMORIAL HOSPITAL LTD. [2020 (32) G.S.T.L. 59 (AAR-GST-KERELA]. The AAR cannot escape from the pronouncing the ruling provided that any case is pending before the court. Now what should be the progressive action of the assessee? He should wait for the decision and in this time gap, indirectly invite department to issue notice for wrong compliance requirements.
Prepared By CA Akanksha Bohra
 

Post a Comment
Department News


Query
 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com