This edition of November 2024 GST Newsletter, covers important government notifications, compliance deadlines, and other essential updates that businesses should be aware of. This roundup will help you stay informed and meet your compliance requirements. Let’s understand the key highlights from this past month!
SECTION A News & Updates :
- Advisory for Form GST DRC-03A:
The facility to adjust the amount paid through DRC-03 (‘Voluntary or Others’) against the corresponding demand Order through Form GSTR DRC-03A is live on GSTN portal.
- Time limit for reporting e-invoice on GSTN portal:
In light of the captioned advisory, taxpayers with an Annual Aggregate Turnover of 10 crores and above, are required to generate the e-invoice within 30 days from the date of reporting on IRP portal (i.e. e-invoice has to be generated within 30 days from the date of invoice)
SECTION B – Case Laws (GST)
- UNO MINDA LIMITED (SEATING DIVISION) VERSUS THE JOINT COMMISSIONER OF GST AND CENTRAL EXCISE, SALEM TAMIL NADU [2024(10) TMI 965- Madras High Court]
The captioned case paves the way for seeking benefit of amnesty scheme under GST, in cases wherein a combined SCN/Order has been issued for multiple years including the period not covered under the scheme. In the captioned case, HC set aside bunching of SCNs issued for separate years, and directed department to split up SCNs for each and every assessment year so that the petitioner can avail the benefit of amnesty scheme. SCN in the captioned case was issued under section 74 of CGST Act invoking extended period of limitation, alleging incorrect classification of two-wheeler seats. HC accepted the contention of petitioner for issuance of separate SCN for each period, subject to petitioner not raising the issue of limitation in the fresh SCNs.
- M/S. CHIMMNEY HILLS EDUCATION SOCIETY VERSUS ADDITIONAL COMMISSIONER OF CENTRAL TAX ANTI EVASION, BENGALURU & OTHER [2024 (11) TMI 518 – KARNATAKA HIGH COURT]
The captioned case deals with issuance of a common/consolidated SCN under section 74 of CGST Act, involving multiple years. HC in the said case followed its decision rendered in case of M/s Bangalore Golf Club Vs. Assistant Commissioner of Commercial Taxes [2024 (10) TMI 116 – KARNATAKA HIGH COURT]. Consequently, HC held that the notice in the captioned case deserve to be quashed by reserving liberty to respondent to issue separate/independent SCN for each assessment year in terms of Section 73 of CGST Act.
- M/S FUTURE LIMITED VERSUS THE STATE OF MADHYA PRADESH AND OTHERS [2024(11) TMI 41 –MADHYA PRADESH HIGH COURT]
In this case the issue dealt is ‘whether the taxpayer can plead before the Court, after passing the final Order, that the opportunity of hearing was not granted, in case he has not specifically requested for the same’. HC held that in light of Section 75(4) of CGST Act, if a taxpayer does not request for a personal hearing either in writing or orally, he cannot allege pursuant to passing final Order is passed that an opportunity of hearing was denied to him.
- METAL ONE CORPOTATION INDIA PVT. LTD. & OTHERS VERSUS UNION OF INDIA & ORS. AND OTHERS [2024(10) TMI 1534 – DELHI HIGH COURT]
Impact of Circular No. 210/04/2024- GST dated 26 June 2024 for determining the value in case of transaction between foreign affiliate and its Indian counterpart.
Here the dispute is with respect to applicability of GST on reimbursement made to parent company towards deputation of employees in its Indian entity. HC, in light of Para 3.7 of the captioned circular dated 26 June 2024, held that in case where no invoice is raised by related domestic entity in respect of services rendered by its foreign affiliate, the value of services deemed to be considered as Nil. Therefore, in terms of second proviso to Rule 28 of CGST Rules, in case of no invoice, NIL value is to be treated as the market value.
- M/s VASUDEVA ENGINEERING, M/S. LNM FIRE & OTHERS VERSUS THE UNION OF INDIA AND OTHERS [2024(11) TMI 259 –PUNJAB AND HARYANA HIGT COURT
The issue dealt in this case is condonation of delay in case the appeal in terms of Section 107 of CGST Act is filed beyond the timeline prescribed therein including the additional period of 30 days. HC in the said case held that the delay cannot be condoned under limitation Act since condonation has been provided in the Act itself. However, considering that the cancellation of registration would have cascading effect on the businesses receiving the goods from said person, the decision of cancellation of registration is to be finalised by providing remedy to the concerned aggrieved person.
Also, HC held that the power to hear appeal under Section 107 of CGST Act does not get impacted by the timeline prescribed under said section. Therefore, it shall not deprive a person from claiming the right of hearing of an appeal by filling a writ petition for condonation of delay.
- TIRUPATI BALAJI TRADERS VERSUS UNION OF INDIA, STATE OF KERALA & OTHERS [2024 (10) TMI 1115 – KERALA HIGH COURT]
The captioned case deals with condition prescribed under Section 16(2) (c) of CGST Act i.e. payment of tax to Government. HC by making a reference to the decision of division bench in case of Nahasskhukoor V/s Assistant Commissioner and others [2023 (11) TMI 1153 – KERALA HIGH COURT] held that ITC is a conditional right and the benefit of the same cannot be given unless the tax has been actually paid to the exchequer.
- M/S YASHO INDUSTRIES LIMITED VERSUS UNION OF INDIA & ANR. [2024(10) TMI 1608 –GUJARAT HIGH COURT]
In this case, HC accepted the payment of pre-deposit through Electronic Credit Ledger and held that the same is valid in terms of Section 107 (6) (b) of CGST Act. The petitioner also placed reliance upon the Circular F. No. CBIC-20001/2/2022-GST dated 6th July 2022 and made an argument that the CBIC vide this circular has clarified that any amount towards output tax payable, as a consequence of any proceeding instituted under the provisions of GST Laws, can be paid by utilisation of the amount available in the Electronic Credit Ledger of a registered person.
- M/S HITESH GWALANI (M/S BABA SUPPLIER) [2024(10) TMI 1420 – APPELLATE AUTHORITY FOR ADVANCE RULING, RAJASTHAN]
In this case, the principle question dealt is whether the valuation mechanism (Margin scheme) prescribed vide Notification No. 08/2018-Central tax (Rate) dated 25 January 2018 covers goods other than second hand motor-vehicle. With respect to said question, appellate authority held that while the notification says second hand motor vehicle, the benefit of margin scheme can be availed in case of other goods as well subject to they qualify as second-hand goods.
The other important issue dealt is distinction between second-hand goods and scrap. With respect to the same, Appellate authority stated that the difference between these two would depend upon usability of the items. Scrap requires processing for reusing the same whereas second-hand goods are ready for immediate use. Also, the value of scrap is generally determined by the material’s potential for recycling and reuse, while the value of second-hand goods is influenced by their condition, brand, and demand in the used goods market. Further, the reference to second hand goods in the margin money scheme is to such goods whose pre & post sale/disposal usage remains the same or minor processing that does not change the nature. Therefore, the benefit of margin scheme shall not apply in case of scrap.
- M/S PAYLINE TECHNOLOGY PRIVATE LIMITED VERSUS APPELLATE AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH [2024(10) TMI 1489]
In the caption case, the issue dealt is with respect to taxability of trading in vouchers. Appellate authority held that while the vouchers qualify to be goods being a movable property, trading in vouchers qualify to be service since there is transfer of right to use goods. Further, the value in case of trading of vouchers shall be difference between selling and purchase price of such vouchers. Time of supply in such case shall be time vouchers are traded or sold.
SECTION C Case Laws (SERVICE TAX)
- ALCHEMIE ORGANICS VERSUS C.C.E & S.T. – VALSAD [2024(6) TMI 1413 – CESTAT AHMEDABAD]
The issue involved in this case whether RCM is applicable on the remuneration (salary + allowance + commission on profit of the company) paid to Directors. Tribunal noted that TDS under Section 192 of Income Tax Act, 1961 was deducted on the total remuneration paid to Directors and Form 16 was issued. Therefore, the remuneration paid to Directors is not liable to service tax.
- AK BISWAS LOGISCTICS PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX- SERVICE TAX AHMEDABAD [2024(11) TMI 8 – CESTAT AHMEDABAD]
In this case, the issue involved is taxability of reimbursement amount which includes a small commission over and above the charges recovered. Appellant in the present case is CHA and has recovered certain charges which he has incurred on behalf of the importer/exporter. Also, he has charged a small amount of commission over and above the actual charges recovered. Tribunal in the said case observed that the facts of the matter remains that the service provider has provided various kind of the services to the appellant importer/exporter’s client and necessary invoice containing service tax has been raised by the service provider. A small variation in form of commission cannot change the nature of the services which have rendered in the entire transaction. Therefore, the appellant has recovered the same on pure agent basis. Hence, the demand towards the said reimbursement shall not sustain.
Disclaimer: This newsletter provides general information prevailing at the time of preparation, and we take no responsibility to update it with the subsequent changes in the law. The information provided hereinabove is intended as a news update, and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this newsletter. It is recommended that professional advice be taken based on specific facts and circumstances. This newsletter does not substitute the need to refer to the original pronouncement.
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