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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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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
 

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