E-Book: GST UPDATEZ

141 R. Srivatsan, IRS In the recent judgement the Hon’ble Delhi High Court in M/S Krishna Fashion vs. Union of India & Ors. [W.P. (C) 602/2022 & CM APPL. 1696/2022 dated January 18, 2022] held that once the assessee is cooperating and has submitted the relevant documents to the Revenue Department then the bank accounts and Electronic Credit Ledger (ECL) of such assessee to be unblocked upon the expiry of one year from the date of imposing such restrictions. As per the Section 83(2) of the Central Goods and Services Tax Act, 2017 with regard to Provisional Attachment of Bank Accounts and freeze them, the Impugned order to block will stand invalid upon completion of one year from the date of passing such order. A similar decision was taken in the case of Barmecha Texfab Pvt. Ltd. Vs Commissioner, Govt. of Gujarat by Honourable Gujarat High Court which went on to say that if the Taxpayer is cooperating, it’s all the more a reason to withdraw the deterrent provision. Also, the Gujarat High Court in case of Valerius Industries v. Union of India [2019] (Gujarat) held that such powers should neither be used as a tool to harass nor should have irreversible detrimental effect on business of assessee. The powers given to the authorities should be resorted to only as last resort and should be used cautiously only on weighty grounds. So, the bottom line is... Once the statutory period comes to an end, the authority has no further discretion in the matter, unless a fresh order is passed. The Hon’ble Bombay High Court while quashing the Designated Committee’s decision of rejecting declaration under SVLDR Scheme observed that a liberal interpretation had to be given to the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (SVLRS) as the intent was to unload the baggage relating to legacy disputes pre-GST era, in respect of the show-cause cum-demand notice against an assessee. The honourable Nagpur bench of the Bombay High Court in the WRIT PETITION NO.1879/2020 in the case of M/s. UCN Cable Network (P) Ltd vs The Designated Committee under Sabka Vishwas Legacy Disputes Resolution, Nagpur, dated 04-02- 2022 pronounced the decision today 04- 02-2022. The crux of the matter is that in situation of (I) SCN issued prior to 30.06.2019, but adjudicated after 30.06.2019 (but before closure of SVLDRS), the correct category under which the declaration has to be filed is "Arrears" as claimed by the Petitioner and not "litigation" as held by the department. (ii) An amnesty scheme like SVLDRS is remedial in nature and has to be interpreted liberally and widely. (iii) An assessee cannot be placed in a worst position for opting for the scheme. (iv) All demands under the "case" have to be considered together under the scheme and not individually. For all the above reasons, decision of the Designated Committee under Sabka Vishwas Legacy Disputes Resolution, Nagpur on the subject of SVDLRS-3 was quashed and the respondent were directed to reconsider the issue in the light of the above observations. Click here to read full document GST UPDATEZ ON 04-02-2022 Completion Of Investigation Not a Condition Precedent for Eligibility Under 'Sabka Vishwas' Scheme.

142 R. Srivatsan, IRS The objective of SVLDRS is reducing litigation and disputes relating to legacy taxes namely, Central Excise and Service Tax so that taxpayers could focus on GST. The Scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration. With this intent in mind, I believe, this judgement has been pronounced. Blocking filing of the statement of outward supplies in Form GSTR1 in case of non-filing of returns in Form GSTR3B for the preceding tax period 3. Refund: Few basic changes in Track Application Status such as showing information of tax period, GSTIN, etc. Aadhaar authentication made mandatory for refund 4. Payment: Removal of names of merged Banks from GST Portal 5. Front End: Press release section has relocated from ‘Home’ page to ‘Help and Taxpayer Facilities’ Upgrade of emsigner from ver 2.6 to ver 2.8. GST UPDATEZ ON 07-02-2022 Module wise new functionalities deployed on the GST Portal for taxpayers - January 2022 Click here to read full document Various new functionalities are implemented on the GST Portal, from time to time, for stakeholders. In the month of January 2022, the following changes are made: 1. Registration Module: Aadhaar authentication made mandatory for filing of the Revocation application Submission of Aadhaar enrolment ID for e- KYC verification for Existing and New registrations Triggering of alerts to Returns Module in case of change in status/ category of Taxpayer Filing of revocation application even after 30 calendar days (but within 90 calendar days) 2. Return: Change in filling frequency of ITC-04 (turnover > 5 crores - half-yearly filling, otherwise annually) Enhancements in Search HSN functionality GST UPDATEZ ON 11-02-2022 E-Way Bill and E-Invoice System downtime is scheduled The E-Way Bill and e-invoice system downtime are scheduled for February 12, 2022, due to maintenance activity. It has been informed that the E Way Bill users that downtime of all the E Way Bill and e-Invoice operations (for all modes – Web, API, Bulk, Mobile & SMS) is scheduled between 08:00 PM and 10:00 PM on February 12, 2022, and between 07:00 PM and 09:00 PM on February 13, 2022, due to maintenance activity. All the users have been requested to make necessary arrangements to carry out the activities such as E Way Bill generation, updation of Part B, Extensions of E Way Bill, etc. outside the scheduled downtime.

In order to curb false billing and GST claims through fake invoice, the Government is planning to deploy blockchain technology. The system will be utilized for storing and tracking goods movement in the initial phase. The government hopes to use the technology to uncover bogus claims as soon as possible, particularly in cases when a fake supply is filed on paper. To digitize the GST process, the government is likely to adopt additional cutting-edge technologies. Blockchain is the same technology that ensures the security of bitcoin. Several other sectors are using blockchain technology into their processes to make them safer and more secure than ever before. In addition, the department is also expected to deploy blockchain technology to track GST credit movement. Credit movement in different firms registered with the same Aadhaar would be checked using blockchain technology. Futuristic! 143 R. Srivatsan, IRS GST UPDATEZ ON 16-02-2022 Block-chain technology to be used to curb fraudulent billing and GST evasion GST UPDATEZ ON 17-02-2022 Admissibility of ITC on hiring of motor vehicle under - GST paid on RCM basis The question of ITC eligibility on services availed in relation to motor vehicles for transportation of passengers has been a matter of dispute even under Service tax regime. Similarly, under GST, availment of ITC on motor vehicles and ancillary services availed for motor vehicles is treated as blocked credit with certain exceptions under section 17(5) of the CGST Act, 2017. Recently, the question regarding availability of ITC on hiring of motor vehicles for transportation of passengers was raised before Maharashtra AAR in the case of MAANICARE SYSTEM INDIA PVT LTD The applicant is a private limited company engaged in business of providing manpower services. The applicant hired Buses to enable its employees to reach the premises on time. The applicant thus raised a question seeking clarification as to whether the applicant is eligible to take input tax credit on GST paid under RCM @5% for hiring of buses for transportation of employees. The applicant submitted that the hiring of bus service for commutation of employees is in the course of providing outward supply relating to his business. The applicant being service receiver was liable to discharge GST @ 5% under RCM. In support of their claim for eligibility, reliance was placed by them on the favourable decisions in the cases of YKK INDIA PVT. LTD. [2020 (34) GSTL 670] and TATA MOTORS LTD. [2020 (41) GSTL 35]. It was concluded that the unregistered supplier of Transportation of passenger’s service is not required to pay GST @ 5% and thus, applicant (who is the recipient) shall pay tax under RCM as per the Notification No. 29/2019-CT(Rate) dated 31.12.2019 as amended. Further, it was also held that as per Section 17(5), input credit is allowed on motor vehicles or conveyances in transportation of passenger having seating capacity of more than 13 persons (including driver).

144 R. Srivatsan, IRS The input credit on leasing, renting, hiring of motor vehicle having seating capacity of more than 13 persons shall be allowed w.e.f. 01.02.2019. Consequently, it was held that the ITC on hiring of motor vehicles is available to the applicant. It has been ruled that as per the rate notification no. 11/2017-Central Tax (Rate) dated 28.06.2017, prescribing the rate of GST as 5% for transportation of passengers by any motor vehicle designed to carry passengers where cost of fuel is included in the consideration charged from the service recipient is subject to the condition that the credit of input tax charged on goods and services used in supplying the service, other than ITC of input service in the same line of business has not been taken. Therefore, the restriction of credit availment is on the supplier of such service but in the present case, the applicant was paying tax under reverse charge mechanism in the capacity of recipient of service. Hence, the restriction as contained in the rate notification was not applicable on them and they are eligible for Input Tax Credit when paid on RCM basis. GST UPDATEZ ON 18-02-2022 Online courses for doctors if mandated by the medical council is liable for GST Under GST both, medical care and education are outside the gamut of the GST framework. In its ruling on the application filed by Cmepedia Gerda the Karnataka AAR has opined that the online education courses cannot be considered to be covered under the definition of medical facility even if the course is mandatory for doctors. Also, it held that this is not a professional course and more on the lines of executive education and therefore should face GST liability. The applicant company provides services to doctors to maintain the professional standards as required by the law and guidelines by the Medical Council. The ruling said that the online course is not a part of a curriculum required to obtain a degree from a recognised university and so it should be treated as any other online education. In this case exemption has been denied as the company per-se did not provide any education services and were only acting as liaison offices between doctors and professional organisations and content providers on the other. Therefore, the services provided by the applicant to the doctors and other health care professionals is not covered under any exemptions and hence is taxable. Click here to read full document GST UPDATEZ ON 19-02-2022 Option for composition levy FY 2022- 23 Click here to read full document

145 R. Srivatsan, IRS The Window to opt in for composition for the FY 2022-23 is now available at GST Portal. The eligible taxpayers, who wish to avail the composition scheme may opt in for composition before 31st March 2022. A registered taxpayer has to follow this path on GSTN portal.... post login Step-1: GST Login -> Services -> Registration -> Application to opt for composition levy. Step-2: Select the category (Manufacturer/ Service Provider/Others) Step-3: Fill the declaration and validate using DSC/EVC. This process will facilitate a registered person to be a Composition Taxpayer for the next financial year of 2022-23. GST UPDATEZ ON 23-02-2022 GSTN enables facility for filing LUT for FY 2022-23 any existing laws are not eligible to file the GST-LUT. In such cases, they would have to furnish a Bond for Export instead of LUT. This facility for filing LUT in Form GSTRFD-11 has been enabled for financial year 2022-23 on the GST Common Portal. The step-by-step guidelines to file LUT for F.Y. 2022-23 are as below: 1. Post login navigate through Services --> User Services --> Furnish Letter of undertaking (LUT) 2. Select the Financial Year 2022-23. 3. Select all the three checkboxes for accepting the conditions. 4. Enter the details of two independent witnesses. 5. Sign the application form using DSC or EVC and submit. GST UPDATEZ ON 24-02-2022 Cosmetic Dental care attracts GST - Exemption not available The Letter of Undertaking (LUT) is prescribed to be furnished in the form GST RFD 11 under rule 96A, whereby the exporter declares that he will fulfil all the requirement that is prescribed under GST while exporting without making IGST payment. The LUT submitted is valid for one whole financial year and an exporter needs to submit a new LUT for each financial year. The exporters who have been prosecuted for any offence and the tax evasions exceeding Rs 250 lakhs under CGST Act or the Integrated Goods and Service Act, 2017 Supply of dental services like teeth whitening or application of veneer (also known as smile-fixing treatment), are subjected to a levy of Goods and Services Tax (GST) at 18%. The GST- Authority for Advance Rulings (AAR), Maharashtra bench in its recent ruling, has distinguished between dental services that would be in the nature of ‘healthcare services’ and those that will constitute a ‘cosmetic treatment’. Only dental services that can be categorized as healthcare services will be exempt from the tax.

146 R. Srivatsan, IRS The advance ruling was sought on the subject matter (by Jyothi Ceramics) where the applicant in addition to manufacturing and supplying ceramic material used for making dental crowns and artificial ceramic teeth, also runs a dental clinic. Services provided at the dental clinic, include all dental treatment, including bleaching or whitening of teeth and affixing dental veneers, which involves fixing of thin custom-made ceramic shells (veneers) that cover the front surface of teeth and improve appearance. The AAR bench observed that ‘healthcare services’ under the GST laws means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy, in any recognized system of medicine in India. However, it does not include hair transplant or cosmetic or plastic surgery, except if it is undertaken to reconstruct anatomy or function of a body part affected owing to congenital defects, development abnormalities, injury or trauma. Given the above definition, the AAR held that services such as the ones provided by the applicant would not be healthcare services and would attract 18% GST. The bottom line therefore is that healthcare services are specifically defined, and exempted while any cosmetic treatment cannot be exempt from GST. So, be careful, your dazzling smile comes at a price. Starting from 01st April 2022, e-invoicing will be mandatory for taxpayers whose aggregate turnover is more than Rs.20 crore Rupees In this regard necessary Notification No. 01/2022 Central Tax, dated 24.02.2022 has been issued. GST UPDATEZ ON 28-02-2022 Liquidated Damages - Amounts to Supply of Service- Tolerance of an Act The Telangana Authority for Advance Ruling (AAR) ruled that liquidated damages recovered by Applicant for delay in commissioning under an agreement constitutes "supply" under the Goods and Service Tax (GST) law, attracting a levy of 18% GST. The Applicant, engaged in production and distribution of electricity obtained from solar energy, entered into an agreement with a company for construction of a solar power project. The agreement clause provided for liquidated damages for delay in commissioning and delivery of contract. The Applicant, in its application to the AAR, raised the query as to whether the liquidated damages recoverable by him, due to delay in commissioning of the project, are liable to tax under the GST laws? The AAR held, observing the provisions of section 55 of the Indian Contract Act, 1872, that failure to perform the contract at an agreed time rendered the contract voidable at the option of the aggrieved party. Alternatively, such party could recover compensation for loss occasioned by nonperformance and therefore constituted a consideration for tolerating an act or a GST UPDATEZ ON 25-02-2022 E-invoicing for taxpayers if Turnover crosses 20 Crores

147 R. Srivatsan, IRS The term "consideration" in relation to supply of goods or services or both included the monetary value of an act of forbearance, so, such a toleration of an act or situation under the agreement constituted supply of service under the Act, making the money value or consideration of such tolerance exigible to GST. Further, observing that the contract in the present case itself prescribed the date of determination and payment of liquidated damages, the date of determination of liquidated damages, as per the formula prescribed in the contract, would be the time of supply of such service. That was not the case under Service Tax! entire supply. In the instant case, the commercial coaching service is principal supply. The officers of Alwar (Rajasthan) CGST Commissionerate detected a modus operandi relating to short payment of GST on composite supply of commercial training or coaching services along with goods such as school bag, notebooks, tshirts, sweat shirts, umbrellas, etc. to their students. While the students were charged a lump sum amount for these services/goods, the tax was deposited on individual supplies of bags, notebooks etc, resulting in short payment of GST. In the case of taxes paid on individual item basis, Notebooks attract GST at the rate of 12 per cent, T-shirts and sweat shirts attract levy at the rate of 5 per cent (in case maximum retail price is less than ₹1,000) and 12 per cent (in case maximum retail price is over ₹1,000). Rate for umbrella is 12 per cent, etc. Such a supply would be a composite supply, where the principal supply is Commercial coaching service attracting 18% GST on the total value and Artificial vivisection is not available for assessment of tax liabilities. Therefore, any attempt to bifurcate it into different items may not be tenable. However, a mixed supply is treated differently wherein the goods/services could be sold together only due to convenience or requirement of the client but are not sold together customarily, which are not naturally bundled. GST UPDATEZ ON 01-03-2022 GST rate for coaching services attract 18 % A Commercial coaching and training institute cannot deposit GST on individual items basis for the supply of notebooks, tshirts, bags, sweat shirts, etc. to students along with coaching service. These types of bundled services fall under the category of Composite Supply and attract 18 per cent GST on the entire value of the bundle. A composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The Rate on principal supply will be rate for GST UPDATEZ ON 02-03-2022 GST collection crossed Rs 1.30 lakh crore mark for the 5th time in February 2022

148 R. Srivatsan, IRS The gross GST revenue collected in the month of February 2022 is Rs 1,33,026 crore of which CGST-Rs 24,435 crore, SGST-Rs 30,779 crore, IGST is Rs 67,471 crore, (including Rs 33,837 crore collected on import of goods) and Cess-Rs 10,340 crore (including Rs 638 crore collected on import of goods). The revenues for the month of February 2022 are 18% higher than the GST revenues in the same month last year and 26% higher than the GST revenues in February 2020. During the month, revenues from import of goods was 38% higher and the revenues from domestic transaction (including import of services) are 12% higher than the revenues from these sources during the same month last year. February, being a 28-day month, normally witnesses revenues lower than that in January. This high growth during February 2022 should also be seen in the context of partial lifting of lockdowns and various restrictions that were put in place by various States due to the omicron wave, which peaked around 20th January. This is for the fifth time GST collection has crossed Rs 1.30 lakh crore mark. One more landmark is that since the launch of GST, for the first time, GST cess collection crossed Rs 10,000 crore mark, which signifies recovery of certain key sectors, especially, automobile sales. Source: - PIB Release ID: 1802040 In an interesting judgement the Telangana Authority of Advance Ruling (AAR) has considered that seeds are not “agricultural produce” and should attract GST, probably a development that could create additional liability for the agriculture sector as “seed” is treated separately from “grain”. The law therefore applicable to grain and seed will be different and the concessions applicable to grain produced by a cultivator will not be applicable to seed, said the ruling in the case of Ganga Kaveri Seeds and Narasimha Reddy & Sons. Applying, the ejusdem generis principle ie., where general words follow a list of particular things, the general words are restricted to matters of the same kind as those specifically listed. These rulings held that raw material used in definition of agricultural produce is confined to food, fibre, etc., which can be consumed, and as seeds are not consumed but cultivated, and the same are liable to GST. In the definition of agricultural produce, ‘raw material’ is used which is a general term and is in the company of specific words such as food, fibre and fuel. These specific words indicate direct consumption by humans or in industry but not in cultivation, the AAR ruled. These specific words indicate direct consumption by humans or in industry but not in cultivation – supply of seed does not fall under the definition of agricultural produce as the seed does not fulfil the utilities prescribed therein. Auxiliary supplies like Storage of the seeds in the leased storage facility or godowns, loading, unloading and packing of seeds by the on any basis are not exempt from payment of GST. In common parlance, one would tend to perceive seeds to be agricultural produce and hence not liable to GST. But this is contrary to that perception. GST UPDATEZ ON 03-03-2022 Seeds are NOT Agriculture Produce and hence liable for GST Click here to read full document

In a very important and path breaking judgement the Honourable Madras High Court has allowed the Credit of Service Tax Paid under RCM which could not be availed as Transitional Credit under the GST regime in the case of Ganges International Private Ltd & others vs Asst Commissioner of GST & C.Ex., and in two other petitions under W.P.Nos.528, 1092 & 1160 of 2019 The brief issue involved in this case is that the petitioners are (1) Ganges International Private Ltd, (2) SRC Projects Private Ltd, and (3) Supreme Petrochemicals Ltd, were engaged in providing various services to Government/Private parties and were registered with the erstwhile Service Tax Provisions which attracted levy under RCM. From 01.07.2017 as the GST has come into effect, the petitioner was migrated into the GST regime from that date. The assessee had filed the last service tax return in the erstwhile regime for the quarter from April to June 2017 on 15.08.2017. However, they had paid the due service tax on 30.12.2017 while it had attracted levy under Reverse Charge Mechanism belatedly though after 27-12-2017, the last date for claiming credits under TRAN-1. In order to get the benefit of the said amount, as, service tax paid is purely an input, on Reverse Charge Mechanism (RCM) for which, credit can be taken by the petitioner under erstwhile Cenvat Credit Rules, 2004 but not under GST regime directly, they had made an pplication for refund of the tax so paid, of course within the time limit prescribed with the 149 R. Srivatsan, IRS a Department. The said application seeking refund was rejected on the ground that though the assessee is eligible for taking Cenvat credit of the amount so paid under CENVAT Credit Rules 2004 while there is no provision in the new regime (GST) to allow it as an input tax credit (ITC) in electronic cash ledger. In the absence of any specific provision, such kind of refund made by the assessee under the pretext of Transitional Credit refund of the input tax credit cannot be considered and therefore, the claim was held untenable and accordingly, it was rejected. Aggrieved by the said order, a writ petition was filed in the Honourable Madras High Court. While allowing the petition, a Single Judge bench observed that, in these kinds of special situations, for which, the provision if not Section 142(3), no other eligible provision is available. This kind of situation necessarily to be met with by the Legislation, for which, transitional provisions has been brought in, in the Statute, there can be no impediment for invoking Section 142(3) of the Act by invoking the ‘Doctrine of Necessity”. The Court having convinced itself of invoking the Doctrine of Necessity also directed the GST Department to pass the necessary orders within a period of six weeks from the date of receipt of a copy of this order following the principles of Natural Justice. where the petitioners can put forth their case by providing all necessary inputs to the satisfaction of the authorities to take a decision in the right direction. One more concept added to the cap of litigations!!!!!! GST UPDATEZ ON 11-03-2022 Madras High Court allows Credit of Service Tax Paid under RCM which could not be availed as Transitional Credit under GST following the Principle of Doctrine of Necessity Click here to read full document GST UPDATEZ ON 16-03-2022 No ITC for Vehicles Received under Stock Transfer for Specified Business Activities unless for further Supply or Sale.

150 R. Srivastava, IRS admissible generally on all the goods which fall under the definition of Inputs. Inputs have been defined under the CGST Act 2017 in Section 2(59) as “input means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business”. Further submitted that the Capital Goods have been defined under the Act in Section 2(19) as, “Capital goods mean goods, the value of which is capitalized in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business”. The Appellant has submitted that they are capitalizing the Motor Vehicles subjected to the mentioned usage. Thus, apparently, ITC should be admissible on these vehicles, as ‘capital goods. The Coram of AAAR held that *none of the uses to which the BMW Vehicles are put to, fits into the uses which find mention in sub-Section 17(5). The vehicles under question are not meant for “further supply of such motor vehicles’ i.e. ‘further supply as such”, but are first put to the mentioned uses. These are disposed of after prolonged use, which may even not restrict to 12 months as mentioned by the Appellant. If the argument of the party is allowed then in that case all the motor vehicles, irrespective of the nature of Supply will be eligible for ITC across the industries. It will no longer be a restricted clause for Car Dealers but will be an open clause for all the trade and industries to avail the ITC on all the Vehicles purchased by them. This has never been the intent of the Legislation”. It was further held that “as regards to the Applicant’s contention that these vehicles are sold after 12 months ITC may be allowed as Input, it was observed that in the very first demonstration run demo car loses the character of the new motor vehicle and demo vehicles is sold akin to second-hand goods and which is different from new Vehicle and The Haryana Appellate Authority for Advance Ruling (AAAR) has held that ITC is not allowed for vehicles received under stock transfer for specified business activities unless for further supply or sale. The Applicant M/s BMW India Pvt. Ltd. Gurugram, which is registered in GST at Gurugram as a State-administered taxpayer for running a training centre for the training of Engineers and Marketing professionals etc. They get BMW branded vehicles made in Chennai plant as inter-state stock transfer on which IGST and compensation cess has been paid, and use these vehicles for ‘a very limited period of about 12 months, as Training fleet, press fleet, Marketing fleet, Sales fleet, Visitor cars and Personally Assigned Vehicle. The appellant applied before AAR for clarifying whether the Applicant unit is entitled to avail ITC of IGST and Compensation Cess paid on receipt of cars on stock transfer basis for use in relation to specified business activities and thereafter onwards supply to dealers after use by the Applicant unit for a limited period of time. These vehicles are eventually supplied as old and used vehicles in terms of Notification No.08/2018-C.T. and GST is paid on such supply at a concessional rate as applicable on the old and used Motor Vehicles under the Notification. The Applicant has specifically mentioned that they are not seeking relief in respect of 2 categories of Vehicles i.e. Visitor cars and Personally Assigned Vehicles. The AAR has held that the Applicant is not entitled to avail input tax credit on motor vehicles put to use as per their submissions. Aggrieved by the order of AAR the applicant approached AAAR and submitted that ITC is

151 R. Srivatsan, IRS With this thought process, in future, restaurants, kiosks and even pizza companies that buy these toppings would have to cough up 18% GST. Candidly, Classification of products has been a complex issue under GST also. For instance, while lassi and milk are not taxed under GST, flavoured milk is taxed at 12% and flavoured lassi is outside the ambit of the tax regime. So, parotta is not similar to paratha, but naan and a samosa eaten over the counter and on a chair outside the shop are also taxed differently. Quite a food for thought!!!! accordingly treated differently under GST law, so the demo car is not an input. So, it was held that the BMW Vehicles received by the appellant under stock transfer have never been received with the intent to simply ‘further supply of such motor vehicles, / ‘sell as such’. Input Tax Credit on these vehicles, thus, cannot be allowed”. Quite an interesting decision. Click here to read full document GST UPDATEZ ON 17-03-2022 Pizza topping is not a pizza and hence should be classified differently and levied a higher 18% The Haryana appellate authority for advance ruling (AAAR) has distinguished between Pizza and Pizza toppings and held them to be classified under different headings. GST rates on pizzas differ on the basis of how they are prepared and sold. A pizza sold and eaten within a restaurant attracts 5% GST, the pizza base bought separately attracts 12% while a pizza delivered at home attracts 18% GST. The AAAR ruled that pizza topping should face 18% GST as its preparation method is different from that of a pizza. It considered all the ingredients used in a topping and concluded that while a pizza topping is sold as a "cheese topping" it's not really cheese and hence should attract higher tax as it would merit classification as food preparation On reading the Order, it appears that the authorities have given weightage to the actual ingredients vis-a-vis common parlance under which one would treat them as cheese toppings and classify them accordingly. Click here to read full document GST UPDATEZ ON 18-03-2022 GSTN enabled a new feature of Geolocation for registration processes The Goods and Services Tax Network in a step to use advance technology has enabled an additional step for users on the GST portal, now requiring them to select the geolocation of their address. This step will need to be done for new GST registrations and while amending an existing registration. According to the GST Acts, if a taxpayer wishes to make changes to the address of their principal place of business or an additional place of business, they are required to file GST FORM REG-14. The geolocation must be selected as part of the GST registration application along with the proof of address for the new location. This can be done on the website by either moving the marker to pinpoint the location or finding it through the provided search bar.

152 R. Srivatsan, IRS With the amendments in the Finance Bill, the government had proposed to tighten the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets on the Direct taxes side. On Indirect Taxes (GST) the proposals of the Finance Bill 2022 largely remained unchanged from the Bill to the Act. The legislative changes under the Finance Act 2022 with reference to Indirect taxes are covered under Chapter IV (from page No:58) while more specifically changes relating to GST are covered under Clause 100 to Clause 124. The most expected change with reference to interest liability is covered under Clause 111 _i.e. where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding 24% as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated in such manner as may be prescribed. This retrospective amendment takes position with effect from the 1st day of July, 2017 at last! Once an application is made for a change of address, the GST officer will need to approve or reject the change within 15 days after due verification of the same. On approval by the officer, the date of amendment of GST registration would be the date of occurrence of the event that warrants such amendment. In case a GST officer fails to take action within 15 working days post the submission of the amendment application or within seven working days of receipt of clarification or additional information, then the certificate of registration will stand amended automatically to the extent applied for. The amended certificate FORM GST REG06 will be made available to the taxpayer on the GST portal post login. It appears that the map data is taken from Map my India which is an Indian technology company that builds digital map data, telematics services, location-based SaaS and GIS AI technologies. GST UPDATEZ ON 31-03-2022 Government notifies Finance Act, 2022 GST UPDATEZ ON 01-04-2022 GST Revenue collection for March 2022 The Finance Bill 2022-23 was passed by Rajya Sabha as well as Lok Sabha last week and finally received the assent of the President of India. Consequently, the Ministry of Finance has notified the Finance Act, 2022 on 30th March 2022. With the passage of the Finance Bill, 2022 into The Finance Act 2022 ″ the Parliament completes the Budgetary exercise for the year 2022-23. The Central Government has brought 39 changes before passing the Finance Bill. The gross GST revenue collected in the month of March 2022 is ₹ 1,42,095 crore of which CGST is ₹ 25,830 crore, SGST is ₹ 32,378 crore, IGST is ₹ 74,470 crore (including ₹ 39,131 crore collected on import of goods) and

153 R. Srivatsan, IRS concessional rate of 6% conditional to not avail the ITC. The specified Goods are: 1. Fly ash bricks or fly ash aggregate with 90 % or more fly ash content; Fly ash blocks; 2. Bricks of fossil meals or similar siliceous earths; 3.Building bricks, Earthen or roofing tiles. Please refer to Notification No. 01 & 02/2022-Central Tax (Rate) and Notification No. 03 & 04/2022-Central Tax. C.Cess is ₹ 9,417 crore (including ₹ 981 crore collected on import of goods). The gross GST collection in March’2022 is all time high breaching earlier record of ₹ 1,40,986 crore collected in the Month of January 2022. The revenues for the month of March 2022 are 15% higher than the GST revenues in the same month last year and 46% higher than the GST revenues in March 2020. The average monthly gross GST collection for the last quarter of the FY 2021-22 has been ₹ 1.38 lakh crore against the average monthly collection of ₹ 1.10 lakh crore, ₹ 1.15 lakh crore and 1.30 lakh crore in the first, second and third quarters respectively. The improvement in revenue has also been due to various rate rationalization measures undertaken by the Council to correct inverted duty structure. Source: Press Note of MOF-DOR GST UPDATEZ ON 02-04-2022 Special Concessional rates / no Composition scheme for Bricks: GST UPDATEZ ON 03-04-2022 Transportation of goods in Passenger bus by GSRTC is taxable as a subsect of business support services In an interesting decision, the Gujarat Authority of Advance Ruling has ruled that 18% GST is payable on the transportation of parcels by the Gujarat State Road Transport Corporation (GSRTC) in its passenger buses. GSRTC is mainly engaged in intra-state as well as inter-state passenger transportation. The facts of the matter here are that GSRTC had entered into an agreement with M/s Ashapura Trade and Transport Private Limited to provide space in its buses, on top of the bus as well as in the bus cabin, for transporting parcels for Ashapura. The parcels were booked by Ashapura and transported by the buses run by GSRTC from one station to another station, which comes on its (bus route) scheduled route. With effect from 01st April 2022, entities engaged in the business of the goods listed below will not be eligible to opt for the composition levy of Section 10(1) of the CGST Act 2017. Also, the said entities are not allowed the higher threshold limit of 40 Lakhs Rupees for mandatory registration. Now these goods are treated on par with Ice Cream, edible ice, Pan Masala and other Tobacco products. The dealers can either opt to pay 12% Tax with Input Tax Credit or pay tax at a Click here to read full document

154 R. Srivatsan, IRS GSRTC supplies business support services to its service recipients Ashapura. For various reasons, the AAR held that though GSRTC transports goods by road in its buses and issues parcel receipts, the activity of GSRTC does not fall under the goods transport agency service, Firstly, GSRTC only supports the services to be supplied by Ashapura to its (Ashapura's) recipients. Secondly, GSRTC as per agreement is not responsible or liable in case the parcels, courier covers are lost or damaged in transit, in the buses or premises or bus stations, and the recipient shall be solely responsible and liable for the same. Thirdly, the consideration received by GSRTC includes charges for transportation of parcels and charges for providing parcel office space. Henc, the Authority ruled that GSRTC is neither a GTA nor a courier agency, but are providing Business Support Service and are liable for GST, while not eligible for exemption as a GTA / Courier Agency vide Sr. No 18 of Notification No 12/2017- Central Tax (Rate). Transportation of new thoughts! It was not issuing any consignment notes, nor was it engaged in door-to-door delivery of the parcels booked by Ashapura. For the transportation of parcels, GSRTC receives consideration as per the agreement. Ashapura has registered themselves as a courier agency or GTA. Generally, the main activity that distinguishes a courier agency from other transport agencies is that the courier agency arranges transportation from the door of the sender to the door of the addressee. In other words, the documents, goods, or articles are expected to be picked up by the representative of the courier agency from the premises of the sender and later transported and delivered to the premises of the addressee. In the instant case, GSRTC is not engaged in door-to-door transportation of timesensitive documents. Rather, it was Ashapura that collected documents and parcels and delivered them to the ultimate customer at their address. It was Ashapura, which is engaged in the door-to-door transportation of documents and parcels. GSRTC is merely transporting goods in its buses that are being handed over by Ashapura from one destination to another destination. GSRTC does not have knowledge as to whom the document or parcel ultimately belongs to. This being the facts that surrounds the issue, GSRTC has sought an advance ruling on the issue of Whether GST will be applicable on the parcels of Ashapura that are being transported by GSRTC? If so, under what category of Supply? Whether they are eligible to avail exemption in terms of Sr. No 18 of Notification No 12/2017-Central Tax (Rate) whereby GSRTC is transporting parcels of Ashapura but is neither a GTA nor a courier agency. GST UPDATEZ ON 09-04-2022 Take lenient view in case there is no intention to evade tax Madras HC Click here to read full document The Madras High Court bench has quashed the penalty imposed under GST for a wrong declaration in an e-way bill as there was no intention of tax evasion. The petitioner/assessee challenged the order in Form GST Mov-9 seeking to impose a penalty of Rs. 5,00,774 under Section 129 (3) of the CGST Act, 2017. In issue in dispute is that the petitioner had consigned the goods from its new main place of business, which was not the additional place of business, as per the original registration certificate obtained by the petitioner.

155 R. Srivatsan, IRS However, in the E-way bill and the delivery Challan, the petitioner had declared the consignee as the old address location though the consignment was meant to be discharged at its new place of business. Under these circumstances, the consignment, along with the lorry, was detained. The petitioner submitted that there was no intention to evade tax as the petitioner had generated an E-way bill by declaring the consignee as its additional place of business. The petitioner stated that he amended the registration ex post facto, i.e., on the date of the registration, by including new place of business as an additional place of business. It was pleaded that the imposition of a penalty under Section 129 (3) of the CGST and SGST was unwarranted under the circumstances. The department urged that the petitioner has an alternate remedy under Section 107 of the CGST Act, 2017 and SGST Act, 2017 (Appellate mechanism) and therefore there is no merit in the writ petition. The court noted that the authorities were justified in detaining the goods inasmuch as there was a mistake in the E-way bill. However, the facts indicate that the consignor and the consignee are one and the same entity, namely, the Head Office and the Branch Office. In this case, the petitioner has a new place of business, but has not altered the GST registration. However, steps have been taken to ex post facto include the new place of business in the GST registration. The registration certificate was also amended. The court observed that there was only a technical breach committed by the petitioner and there was no intention to evade tax. The court quashed the order and allowed this writ petition by directing the respondent to release the vehicle and the consignment to the petitioner, if it has not been released already. 1)The brief facts of the case are that the petitioner is engaged in the business of providing employment through consultancy. 2) Petitioner has applied for GST registration (on 17.08.2021) furnishing all the requisite documents as prescribed under the Act, i.e., Aadhar Card, PAN card, house tax receipt. 3) On submission of the application, an inspection (PV) was made at the business premises of the petitioner (on 15.09.2021).All the details, as required by the Inspection Officer, were provided during inspection. 4) Thereafter, a notice was issued requiring the petitioner to submit electricity bill or house tax bill or any other document related to the address of the business place. In reply to it, information and documents as required were furnished by the petitioner, but by an impugned order (dated 23.09.2021) the application for registration was rejected for nonsubmission of electricity bill. 5) The said order was assailed before the appellate authority, but the appellate authority too has rejected the appeal confirming the order of rejection. 6) Through this writ, the petitioner submitted that the order passed by the authorities are patently illegal, perverse and against the provisions of law. The provision of the Act only requires for providing documents, i.e., PAN and Aadhar as well as the property tax receipt, which were furnished by the petitioner, but without looking into the same, the impugned orders have been passed. Therefore, prayed for quashing the impugned orders. Click here to read full document GST UPDATEZ ON 10-04-2022 Fine levied on GST officer asking non-mandatory documents for GST registration

156 R. Srivatsan, IRS Before parting with the judgement, the honourable Court observed that the two authorities (of the State) have acted only with a view to harass the petitioner which cannot be accepted at any cost. Under the circumstances, the Court held that the impugned rejection order dated 23.09.2021 and Appeal Order 28.10.2021 cannot be sustained in the eyes of law and are hereby quashed. The writ petition was allowed with cost of ₹ 15,000/-, which shall be deposited before the High Court State Legal Services Committee, within a period of 20 days from date of this order. More importantly, the honourable Court ordered that the respondents are at liberty to recover the cost from the erring Officer/(s). So, it now boils down to the fact, when it is clear from the records that all the documents as required under the Act were furnished the application should not have been rejected. The honourable Court opined that the officers being (State) legislative functionary has to act fairly and their action must be in consonance with the provisions of the Acts as well as Rules and hence ordered the cost to be recovered from such officer/(s). So, one may decide whether it's a FINE order or not!! I have consciously refrained from mentioning the name of the Honourable High Court / State of incidence. The following is an indicative list of parameters to is given in the instruction issued by the CBIC vide Instruction No. 02/2022-GST, dt: 22-03-2022 for Scrutiny of Assessment under Section 61 / Rule 99 of the CGST laws 2017*: 1. Tax liability in GSTR-1 may be verified with the liability declared in FORM GSTR3B. 2. Reverse Charge Liability may be verified with details of GSTR 2A, Claims of ITC & Taxes paid in GSTR 3B 3. ITC availed for Inward Supplied from ISD may be verified with the details of GSTR 2A 4. ITC availed for all other ITC may be verified with details as available in GSTR 2A 5. Verify that taxable value as declared in GSTR 3B is not less than the net amount liable for TDS and TCS as per GSTR 2A 6. Verify if liability declared in GSTR-3B is less than tax liability as declared in the eway bills. 7. Verify whether ITC is claimed in respect of supplies from taxpayers whose registrations have been cancelled retrospectively. 8. Verify whether ITC is claimed in respect of supplies from taxpayers who have not filed their GSTR-3B returns. 9. Verify whether GSTR-3B of a tax period is filed after the due date as specified in Sec 16(4). If yes, no ITC shall be availed in the return. 10. ITC availed for import of goods may be verified with details as available in GSTR 2A 11. Verify whether ITC reversals required as per Rule 42/43, if any, have actually been made. GST UPDATEZ ON 21-04-2022 Scrutiny of Assessments – Important points Summary of the list of parameters for Scrutiny as given in the SOP for Scrutiny of returns for FY 2017-18 and 2018-19:

157 R. Srivatsan, IRS 12. Verify whether interest liability in terms of section 50 has been paid 13. Verify whether the late fee in terms of section 47 has been paid Though this list is only indicative, and not exhaustive it is believed that it will be very useful to the proper officer while undertaking the work of scrutiny of Assessments. In 2019, the AAAR of West Bengal held that the very transaction mechanism of PLS is that the builder charges a separate consideration from the buyer for choosing a particular floor/location advantage. Thus, the abatement, which is allowed on construction service with respect to land on which construction is done, cannot be extended to PLS as it is altogether a separate service having no association with land. This ruling was quoted by AAAR of Haryana and said PLS will attract GST at the rate of 18% Constructing Complexities in Complex Construction. GST UPDATEZ ON 22-04-2022 PLS different from construction service - Attracts 18% GST The Appellate Authority for Advance Rulings (AAAR) of Haryana has ruled that preferential location service (PLS) is different from construction and will attract GST at the rate of 18 per cent. PLS is an additional consideration collected along with consideration for sale of properties attracts GST rate of 18 per cent where sale/transfer of constructedproperty has taken place before issuance of completion/occupation certificate (CC/OC) the AAAR opined while disposing an appeal application filed by realty major DLF. PLS helps buyers get a directional advantage or floor rise, and attracts a preferred location charge (PLC) that is levied for units that are better located than others in the same premises, such as the ones facing a park, open area or even corner flats. This amount collected is over and above the basic sales price (BSP) and hence cannot be considered as part of construction service. The West Bengal Appellate Authority for Advance Ruling had ruled earlier, while also adding that the same would hold good for the right to use of parking space. (!) GST UPDATEZ ON 28-04-2022 GSTR -1 new facility The Goods and Services Tax Network (GSTN) has simplified the facility to submit GSTR-1 in the portal. As per the GSTN, “submit” button has been replaced with “proceed to file/ summary” “Now you don’t require to generate GSTR-1 summary and then submit it before filing. You just have to click on “proceed to file/ summary button” and the return will be ready for filing. This is a good step to boost ease of compliance. As one would be aware that Form GSTR-1 is a monthly Statement of Outward Supplies to be furnished by all normal and casual registered taxpayers making outward supplies of goods and services or both and contains details of outward supplies of goods and services. Further Easing compliance obligations.

Concurrent levy of C.Ex., and GST on Tobacco is Constitutionally valid 158 R. Srivatsan, IRS Total number of e-way bills generated in the month of March 2022 was 7.7 crore, which is 13% higher than 6.8 crore e-way bills generated in the month of February 2022, which reflects recovery of business activity at faster pace. This trend in revenue clear improvement in the compliance behaviour, which has been a result of various measures taken by the tax administration to nudge taxpayers to file returns timely, to making compliance easier and smoother and strict enforcement action taken against errant taxpayers identified based on data analytics and artificial intelligence. Phenomenal…... Prodigious…. Astonishing…. Exceptional…! GST UPDATEZ ON 01-05-2022 GST Revenue collection for April 2022 highest ever at Rs 1.68 lakh crore The gross GST revenue collected in the month of April, 2022 is Rs 1,67,540 crore of which CGST is Rs 33,159 crore SGST is Rs 41,793 crore IGST is Rs 81,939 crore (including Rs. 36,705 crores collected on imports) &Comp.Cess is Rs 10,649 crore (including Rs.857 crore on imports). The highlight of this record collection is that the gross GST collection in April 2022 is all time high, Rs 25,000 crore more than the next highest collection of Rs.1,42,095 crore, just last month i.e. March 2022. Historically, for the first-time gross GST collection has crossed Rs 1.5 lakh crore mark. Impressively, April 2022 saw the highest ever tax collection in a single day on 20th April 2022 and highest collection during an hour, during 4 PM to 5PM on that day. On 20th April 2022, Rs 57,847 crore was paid through 9.58 lakh transactions and during 4-5 PM, almost Rs 8,000 crore was paid through 88,000 transactions. Comparatively just to understand the immensity the highest single day payment last year (on the same date) was Rs 48,000 crore through 7.22 lakh transactions and highest one hour collection (2-3PM) on the same date last year) was Rs 6,400 crore through 65,000 transactions. During April 2022, 1.06 crore GST returns in GSTR-3B were filed, of which 97 lakhs pertained to the month of March 2022, as compared to total 92 lakh returns filed during April 2021. Similarly, during April 2022, 1.05 crore statements of invoices issued in GSTR-1 were filed. GST UPDATEZ ON 04-05-2022 In a very important decision, the Honourable Karnataka High Court has upheld the constitutional validity of the imposition of central excise duty, national calamity contingent duty (NCCD) simultaneously with the goods and services tax (GST) on tobacco and tobacco products. The court ruled that the taxable event for levy of excise duty would be manufacturing of tobacco and the tobacco products and for levy of GST, the taxable event would be supply of tobacco and tobacco products. The issue involved is that, V.S. Products, a proprietary firm engaged in the manufacturing of tobacco and tobacco products, challenged the continuation of excise duty and NCCD even after introduction of GST from 01st July 2017. Currently, excise duty at 0.5 per cent and NCCD at 25% are imposed on tobacco. However, an abatement of 55 per cent is

even after introduction of GST from 01st July 2017. Currently, excise duty at 0.5 per cent and NCCD at 25% are imposed on tobacco. However, an abatement of 55 per cent is given which means the effective rate of taxation is 11.475 per cent. GST is levied on supply of tobacco products at 28% and on tobacco leaves at 5% apart from Compensation Cess levied at different rates. The company argued that the levy of excise duty on tobacco and tobacco products along with GST amounts to hostile discrimination and is violative of Article 14 which guarantees equality before the law to all persons. It said tobacco and tobacco products are the only goods which have been singled out for hostile and discriminatory treatment subjecting it to two regimes of indirect taxations. However, the court viewed that except for alcoholic liquor for human consumption, petroleum and petroleum products, stamp duty, tobacco and tobacco products and opium, all other goods are liable only to GST. Tobacco, or tobacco products, are brought to GST and excise duty, while opium is brought to GST and is also subject to value added tax. The court said the levy of excise duty on tobacco and tobacco products is a matter of public policy and that it would not interfere with the same. It is felt that though the concept of ‘manufacturing’ seems to be subsumed in the concept of ‘supply’ the legislature still retains the prerogative to levy taxes on both activities. Apparent discrimination but within legislative competence...! 159 R. Srivatsan, IRS GST UPDATEZ ON 08-05-2022 Deduction of a one-third of the value of land towards construction services is not proper The honorable Gujarat High Court delivering an impact making judgement in the case of MUNJAAL MANISHBHAI BHATT Vs UOI of has struck down a portion of a GST notification mandating the deduction of a one-third of the value of land towards construction services, deeming it "arbitrary" The issue involved is that the ad hoc notional deduction of one-third towards value of land in construction services has been a subject of debate and impacts homebuyers severely in various cases. Attention is drawn here to Entry 3(if) of Notification No. 11/2017-Central Tax (Rate) along with paragraph no. 2 of the notification read with Section 7(2) of the GST Acts, Entry No. 5 of Schedule III to the GST Acts as well Section 9(1) and Section 15 of the GST acts; This decision will have a major impact in cases where land value is more than onethird. The inference of the court ruling is that deduction can be higher than one-third, thereby reducing GST brunt on homebuyers. The court held that the deeming fiction leads to arbitrariness and results in violation of constitutional provisions and fundamental right to equality ad therefore ultra vires the GST Act and the overall scheme governing applicability of GST on construction services/sale of land. It must be noted that there is no GST on transfer of land and building, being immovable property outside the ambit of definition of GOODS and the actual value of land must be excluded when GST is made applicable on construction services. Also, one should comprehend that Article 14 of the Indian Constitution comes into play to ensure that the higher deduction towards the value of land is available without any restriction.

Further, while the valuation provisions prescribe an open market value as a guiding principle, creation of ad-hoc deeming provision to determine value of services through a notification definitely and most certainly raises questions on its validity. In my opinion the transactions will be interesting going forward for flats where ascertaining value of undivided share of land may become contentious and a standard rate of deduction may not withstand judicial scrutiny after this judgement and likely to fail miserably. Reading the judgement in full I find that Gujarat High Court unequivocally spells out that even without going to Schedule III, the only service which is supplied to home buyers is the construction service and it is such supply alone can be taxed. Hence, that the land is not a plain parcel, but developed, cannot be grounds for imposing tax on the sale of such land. The impact of this judgement is that builders may consider filing refund of excess tax paid and pass on benefits to homebuyers. Consciously, the Tax officers must look from the angle of Anti-Profiteering as the builders must carefully and correctly quantify the benefit of reduction of taxes so that there are no complexities in the days ahead. Construction of Complex Services also leads to Construction of complex legislation? But one should believe that it is in the interest of the constitutional rights of the citizens. 160 R. Srivatsan, IRS GST UPDATEZ ON 10-05-2022 GSTN advisory to report 6% GST rate against column for 5% in GSTR-1 till functionality is made available on portal A new tax rate of 6% IGST or 3% CGST+ 3% SGST has been introduced on certain goods vide Notification No. 02/2022 dated 31st March 2022. This Notification seeks to bring special composition scheme for bricks & tiles to be taxed at 6% GST without ITC. This amendment was effective from 01st April 2022 vide Notification No.02/2022, however GST portal was not updated in line with the amendment. Changes are being made on the GST portal to include this rate in GSTR-1. As a temporary measure, taxpayers who have to report goods at this rate may do so by reporting the entries in the 5% heading and then manually increasing the system computed tax amount to 6%. This can be done by entering the value manually in the ‘Taxable value’ column next to 5% tax-rate and then increasing the system computed tax-amount to 6% IGST or 3% CGST + 3% SGST in the ‘Amount of Tax’ column under the relevant Table, namely B2B, B2C or Export, as applicable. This will ensure that correct tax amount is reported in GSTR-1. Meanwhile, this rate will be made available on the GST portal shortly. GST UPDATEZ ON 12-05-2022 Are Wellness centres Clinical establishment or Hotel accommodation services Recently, the Appellate Authority for Advance Rulings (AAAR), Uttarakhand state, in the case of Corbett Nature Reserve, held that its naturopathy centre cannot claim GST exemption. The AAAR upheld the ruling given by the Authority for Advance Ruling.

161 R. Srivatsan, IRS were a composite service – comprising accommodation, food and therapy. Thus, the ‘accommodation service’ was the principal supply and the GST rates relating to it would apply. However, in a divergent ruling, in January 2019, the Goa bench of the GST-AAR, in the case of Devaaya Ayurveda & Nature Cure Centre, held it to be a clinical establishment and the services offered by it as health care services and allowed GST exemption. Well....... Conflicting rulings without an iota of doubt, lead to confusion and go against the very objective of providing certainty. While the views of one advance ruling authority are not binding on another, a detailed reasoning in each ruling will at least ensure judicial discipline. In this case, the applicant had submitted that the health care services provided by an independent unit within the resort – viz: Aahana Naturopathy Centre is a clinical establishment, which offers nature cure and yoga therapies. It has an authorised medical practitioner on its rolls and the facilities offered by this unit are available not just to in-house customers but are open to all. The Centre is registered under the Clinical Establishment Act, 2010. Based on these facts, it contended that it qualified as a clinical establishment and should be eligible for exemption as a ‘health care services’ supplier as per Entry 74 of Notification 12/2017. However, the AAAR observed that Corbett Nature Reserve had advertised and marketed its accommodation service as its main service and naturopathy as an additional service. Thus, the entire package of services was of composite nature with principal supply being that of hotel accommodation services, as accommodation services were the predominant element in it. On analysis, it could be seen that naturopathy service is only an ancillary or additional activities at best having a proximal nexus with accommodation services. In concurrence with the above ruling, the, AAR-Gujarat bench of the GST Authority for Advance Rulings (AAR), in the case of Nimba Nature Cure Village had also held that its services do not fall in the category of ‘health care services by a clinical establishment’ and would not be eligible for GST exemption. The AAR had noted that the services provided by Nimba Nature Cure Village GST UPDATEZ ON 13-05-2022 One Time Settlement Scheme by Telangana state for unsettled dues The Telangana government has issued an order for ‘one-time settlement scheme’ (OTS) which is expected to allow more time for Goods and Services Tax (GST) issues. The scheme goes as follows: Applications will be accepted online from May 16 to 30, followed by scrutiny, confirmation of arrears and intimation from July 1 to 15 and submission of settlement letter by tax payer and payment of agreed amount will go on from July 16 to August 15. The registered dealers should apply for the OTS through an online application and dealers no longer in business can apply offline in their respective jurisdictional circles of the commercial taxes department.

162 R. Srivatsan, IRS 2022, a proposal to extend the due date of filing GSTR-3B for April 2022 was under active consideration for a few days. Similarly, the due date for filing GST-PMT06 for the month of April 2022 has also been extended from 25th May to 27th May 2022 vide Notification No.06/2022 Central Tax, dt: 17-05-2022. GSTR-3B is a self-declared summary GST return filed every month (quarterly for the QRMP scheme). Taxpayers need to report the summary figures of sales, ITC claimed, and net tax payable in GSTR-3B. A separate GSTR-3B must be filed for every GSTIN separately. Form PMT-06 is a form for deposit of goods and services tax. This Challan has gained significance after the introduction of the QRMP Scheme. Under QRMP Scheme requires taxpayers to file GSTR-3B every quarter but tax has to be paid monthly. For the first two months of the Quarter, tax can be paid using PMT-06 by the 25th of the following month, which has now been extended for April 2022. The one-time settlement scheme aims to recover over Rs 3,000 crore long-pending arrears pertaining to commercial taxes. Earlier also few states such as Maharashtra, Karnataka, Kerala, Bihar and West Bengal had introduced OTS to recover disputed taxes, successfully and is now followed by Telangana issuing orders for OTS. It's a progressive move as the OTS will help release manpower engaged in legacy issues and allow more time for GST related issues. In fact, it will also allow closure to protracted litigations and at the same time effect early recoveries of tax dues. GST UPDATEZ ON 20-05-2022 GST Council Recommendations Not Binding on Centre & States; Both Parliament & State Legislatures Can Legislate on GST - Hon'ble SC GST UPDATEZ ON 18-05-2022 CBIC extends Due Date for filing of GSTR-3B/ PMT-06 As a one-time relaxation, on account of the technical glitches in the Goods and Services Tax Network, in auto-population of GSTR-2B and GSTR-3B during April 2022, the Central Board of Indirect Taxes and Customs (CBIC) has extended the due date for filing of GSTR 3B from 20th May 2022 till May 24th, 2022. vide Notification No.05/2022 Central Tax, dt: 17-05-2022. This is on the background that a technical glitch has been reported by the Managed Service Provider (MSP) in generation of April 2022's GSTR-2B & auto-population of GSTR-3B on portal and they are in the process for early resolution. Technical team is working to provide GSTR-2B & correct auto-populated GSTR3B at the earliest. Considering the difficulties faced by taxpayers in filing their GSTR-3B for the month of April In a very significant verdict, the honourable Supreme Court held that the recommendations of the GST council are not binding on the Union and the State Governments.

The gross GST revenue collected in the month of May 2022 is ₹1,40,885 crore of which CGST is ₹25,036 crore, SGST is ₹32,001 crore, IGST is ₹73,345 crore (including ₹ 37469 crore collected on import of goods) and cess is ₹10,502 crore (including ₹931 crore collected on import of goods). The revenues for the month of May 2022 are 44% higher than the GST revenues in the same month last year of ₹97,821 crore. During the month, revenues from import of goods was 43% higher and the revenues from domestic transaction (including import of services) are 44% higher than the revenues from these sources during the same month last year. The collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the ₹1.40 lakh crore mark. 163 R. Srivatsan, IRS It has been held that the Parliament intended that the recommendations of the GST Council will have persuasive value only Importantly, the Court held that both the Parliament and the State Legislatures can equally legislate on matters of Goods and Service Tax. In fact, the recommendations of the GST Council are the product of a collaborative dialogue involving the Union and States. They are recommendatory in nature. To regard them as binding edicts would disrupt fiscal federalism where both the Union and the States are conferred equal power to legislate on GST. Article 246A which was introduced by the 101st Constitution Amendment Act 2016 vests the Parliament and the State legislatures with the concurrent power to make laws with respect to GST. If the GST Council was intended to be a decision-making authority whose recommendations transform to legislation, such a qualification would have been included in Articles 246A or 279A. Neither does. The bench of the Apex court was deciding a bunch of appeals filed by the Union of India against a judgment of the Gujarat High Court in which the issue was whether an Indian importer can be subject to the levy of Integrated Goods And Services Tax on the component of ocean freight paid by the foreign seller to a foreign shipping line, on a reverse charge basis? Prior to the GST regime, service tax on ocean freight was fully exempted. However, the exemption was lifted by notifications issued in 2017 to levy GST on the importer, by a reverse charge mechanism. A division bench of the Gujarat High Court in the case of Mohit Minerals quashed the notifications as unconstitutional for exceeding the powers conferred by the IGST Act and the CGST Act. The Appeal of revenue on this issue has now been dismissed. Ok! Refund of Tax already paid?... GST UPDATEZ ON 01-06-2022 GST collection crosses ₹1.40 lakh crore mark GST UPDATEZ ON 08-06-2022 Admissibility of credit on LNG jetties

164 R. Srivatsan, IRS The admissibility of input tax credit with respect to construction of plant and machineries which are affixed to Earth and are in the nature of civil constructions has been a matter of dispute since inception of GST laws. The input tax credit on civil constructions is restricted under the provisions of section 17(5) of the CGST Act, 2017. Recently, the matter regarding availability of input tax credit on LNG jetties constructed on sea shore was raised before Gujarat AAAR in the case of M/S SWAN LNG PVT LTD. M/s. Swan LNG Pvt. Ltd has entered into agreement with Gujarat Maritime Board and Government of Gujarat for development, construction, operation and maintenance of Liquefied Natural Gas i.e. LNG Port with a Floating Storage and Regasification Unit i.e. FRSU. After development of the said Import Terminal, the appellant intends to provide LNG regasification service to prospective customers. The appellant asked the question, whether the jetties constructed by them will be considered as plant and machinery and if they can avail the ITC. They contended the jetties are constructed by them as foundation of plant and machinery and as per explanation to sec 17(6) of CGST Act, 2017, there is no bar on credit on foundation of plant and machinery but the explanation restricts ITC on land building or any kind of civil structure, telecommunication towers or the pipeline laid outside the factory premises. Accordingly, they contended that jetties should be treated as the foundation of plant and machinery which is necessary for outward supply and therefore ITC must be available. After going through Sec 16 and Sec 17 of CGST Act, AAR contended that jetties are nothing but a civil structure. As per AAR, jetties are nothing but they are similar to the building made high above the Subsequently, the appellant filed an appeal before the AAAR against the ruling of AAR. AAAR held that allowing input tax credit on construction of foundation cannot be decided in isolation without deciding as to whether items to be fixed on it falls within the definition of plant and machinery or not and further the same would be used for making outward supply of goods or services or both. LNG Jetties are nothing but civil structures which are excluded from the definition of foundation and structural supports. The foundation that is allowed in definition of plant and machinery is that which fixes the plant and machinery to the earth making it immovable. If certain portion of LNG jetties is used for directly fixing plant and machineries, then it will not make jetties foundation for plant and machineries but they are only in the nature of civil structures. The AAAR held that the appellant has also not produced any evidence to substantiate their claim that LNG jetties which according to them are foundation of plant and machineries will be used for outward supply of goods or services or both. AAAR concluded that the LNG Jetties being built by the appellant are not in the nature of plant and machinery being foundation for equipment, apparatus, machinery for re-gasification to be installed thereon. Therefore, input tax credit on inputs, input services and capital goods for the purpose of building these LNG Jetties is not admissible. The above decision is yet another example of a stringent view taken as regards availability if input tax credit on construction of plant and machinery on the premise that it is to be considered as civil structure. GST UPDATEZ ON 10-06-2022 Residential apartments let out to commercial organisation for residential use of their staff does not make it commercial lease

165 R. Srivatsan, IRS M/s. Kasturi & Sons, (The Applicant) had proposed to let out some of its residential flats, located in a posh South Mumbai area, to Life Insurance Corporation of India (LIC) approached the AAR on the taxability under GST. It contended that the flats that are going to be let out are residential apartments and they are going to be used for residential purposes only. Merely because these flats will be taken by LIC does not change the end usage to ‘commercial. The applicant charges license fee for residential rate. The question is whether this activity is liable for. GST? The Applicant claims that just because it was taken by a commercial organisation for the residential usage of their staff members, the same cannot be treated as usage for commercial purpose. AAR, Maharashtra, dismissed the arguments of GST officer that tenant is a commercial organisation and hence the staff to whom the flat is let out, can sit late in office and work more. And company is making more profit out of this, hence it is not for residential purpose. AAR held that GST applicability is not decided by the nature of the property but by the purpose for which it is used. GST exemption is allowed to applicant. T register and pay GST at 18% if the annual rent crosses 20 lakhs. In my humble opinion also Notification No.12/2017-CT (Rate) is very clear wherein it gives exemption to the nature of the property and its usage and not by the status of recipient and I stand by the correct and judicious decision of AAR, Maharashtra. GST UPDATEZ ON 11-06-2022 Guidelines by TN-SGST to curb fake Registrations The Tamil Nadu government has issued guidelines for identifying fake billing traders who apply for new GST registration. When a registered person issues a Tax Invoice without actual supply of goods/services or payment of GST then such invoice is presumed to be a 'Fake Invoice' The person issuing such bill is a fake bill trader. The registration procedure under the GST Acts has been simplified & streamlined to facilitate doing business by eliminating the need for pre-verification of firm premises. before issue of GSTIN. However, exploiting these simplified processes, many unscrupulous entities have obtained several fake registrations in order to engage in bill trading operations, resulting in revenue losses to the exchequer. As a measure to safeguard the process and ensure genuinity, TN state government has issued instructions in order to prevent potential bill dealers from filing for registration. he exemption is available if the property being let out is a residential dwelling and is used for residential purposes. If the property is used for commercial purposes, the exemption is not available and the landlord or licensor would be required to Click here to read full document

166 R. Srivatsan, IRS Rules 8 and 9 under the TNGST Act have been amended to include the Aadhaar Authentication procedure in new registration situations. The bill traders enter the system using a different identity and continue their bill trading activity. The state government has now instructed that any application for new registration filed has to undergo the process of matching with the database in order to prevent the offence at the entry level itself. If any of the six parameters pertaining to a cancelled registration are found to have been matched with details provided in the application for new registration, the jurisdictional proper officer will invariably conduct pre-verification of the business premises after which approval for grant of registration is accorded. The six parameters include 1. Place of business, 2. PAN, 3. Mobile number, 4. e-mail ID, 5. Authorised signatory and 6. Bank account number. Nip it in the bud if it is an innocuous request is the idea it seems...! The applicant, Vadilal, is in the business of supplying ice-cream in various states in addition to the supplies in Gujarat State. For transporting the goods to places located in different states, Vadilal has been using refrigerated vehicles because the goods have to be stored and preserved at a particular temperature to avoid deterioration in quality. In this regard, various independent agencies, which are owners of refrigerated vehicles, have been providing refrigerated vehicles to Vadilal for transportation of its goods thus providing Supply of Transportation of Goods by road (GTA) Services. So, after delivering the goods at the destination, the refrigerated vehicle returns back. During the return journey, ordinarily, the vehicle travels empty. While be it so, the plastic trays in which Vadilal transported and delivered the goods at the destination, on the other hand, may be lying empty at the location. These empty plastic trays are brought back in the refrigerated vehicle during its return journey. The applicant has sought an advance ruling on the issue of Whether the applicant (Vadilal) can avail input tax credit for the entire amount of GST paid on the transaction of the applicant's goods in refrigerated vehicles, to & fro, although the vehicles travel empty during the return journey? The AAR observed that the GST liability for supply of service by a GTA in respect of transportation of goods by road to a registered person shall be paid by the recipient of services. The applicant is liable to GST under Reverse Charge Mechanism (RCM) for the GTA service supplied to it. The Reverse Charge Mechanism as one may be aware, is the process of where the liability for payment of GST is by the receiver instead of the supplier. GST UPDATEZ ON 12-06-2022 Admissibility of ITC on GST-GTA service on refrigerated vehicles returning empty The Gujarat Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) is admissible on GST paid on goods transport agency (GTA) service supplied to it, despite refrigerated vehicles travelling empty during the return journey.

167 R. Srivatsan, IRS The AAR held that ITC is admissible to the applicant (Vadilal) on GST paid on GTA service supplied to it. Well...... Candidly, in my opinion, despite the fact that refrigerated vehicles travelled empty during the return journey, as the applicant (Vadilal) had paid an agreed freight to the GTA for its service (to & fro) and this agreed freight was inclusive of both the onward and return journey, the GST paid on the entire freight onward & return on RCM basis should be eligible. Justified decision otherwise would have been an objection leading to protracted litigation. The CBIC vide Instruction No. 03/2022- GST has instructed GST officials to upload Speaking Order along with GST Refund sanction order in FORM GST RFD-06 and also specified that post-audit may be conducted within 3 months from issue of FORM GST RFD-06 order for GST Refund claims exceeding Rs. 1 Lakh. So, claims less than Rs. 1 lakh does not require post Audit review. One may recollect that detailed guidelines for processing of refund claims in GST were already issued by the Board vide Circular No. 17/17/2017 —GST dated 15.11.2017 (for manual processing of refunds) and Circular No. 125/44/2019-GST dated 18.11.2019 (for electronic filing and online processing of refunds) to ensure uniformity in processing of refund claims. In both of these Circulars, it has been mentioned that the proper officer shall follow the principle of natural justice before taking the final decision with regard to refund claim. Principle of natural justice inter-alia provides that a detailed speaking order needs to be issued providing a basis for sanction/rejection of refund. Therefore, while passing the refund sanction order in FORM GST RFD-06, the proper officer should also upload a detailed speaking order along with refund sanction order in FORM GST RFD-06. ACES-GST portal provides the facility for uploading a document in pdf format along with the FORM GST RFD-06 order. The same may be utilized by proper officer for uploading the speaking order along with refund sanction GST UPDATEZ ON 14-06-2022 Garnishee Notice cannot be issued when appeal is pending & pre-deposit is paid The honourable High Court of Jharkhand, in the case of NG Gadhiya Vs State of Jharkhand & Others considering the facts and circumstances of the case and in view of the specific provision of sub-Sections 6 & 7 of Section 107 of the GST Act 2017 and in view of the admitted position that the subsequent garnishee notices dated 15.01.2021 covers both the appeals filed by the petitioner, held that on account of predeposit which has been made by the petitioner at appellate stage read with the mandate of section 107 (7) of GST Act, 2017 the petitioner deserves an interim protection. Accordingly, the honourable court ordered that the operation, implementation and execution of the impugned garnishee notices issued in FORM GST DRC – 13 to the petitioner’s banker as well as to third party, have been stayed till the next date. Only fair!!!!! GST UPDATEZ ON 15-06-2022 Post Audit & review of Refund orders- Instructions issued Click here to read full document Click here to read full document

order in FORM GST RFD-06 so that the same is made available to the refund applicant as well as Post-audit/Reviewing Authority online. One may be aware that Sub-section (2) of section 107 of the CGST Act 2017 provides that the Commissioner may examine any decision or order, including an order of refund, with respect to its legality or propriety and he may direct any officer subordinate to him to file an appeal against the said decision or order within 6 months of the date of communication of the said decision or order. Accordingly, as per extant practice, all refund orders are required to be reviewed for examination of legality and propriety of the refund order and for taking a view whether an appeal to the appellate authority under provisions of sub-section (2) of section 107 of the CGST Act is required to be filed against the said refund order. Therefore, now it has been advised that the post-audit should be concluded within 3 months from the date of issue of FORM GST RFD-06 order. The findings of the post-audit shall be communicated to the review branch within the said time period of 3 months. The review of refund order shall be completed at least 30 days before the expiry of the time period allowed for filing appeal under Section 107(2) of the CGST Act 2017. Till the time the functionality for conducting post-audit online is developed on ACESGST portal, post-audit of refund orders may be conducted in offline mode. For this, the relevant documents may be provided to the post-audit cell by the concerned Division through e-Office within 7 days of issuance of refund sanction order in FORM GST RFD-06. At last!!!.... We have a SoP to be followed for the sake of uniformity which is good. The 47th meeting of the GST Council is scheduled to be held on June 28-29, 2022 (Tuesday & Wednesday) in Srinagar, to deliberate on the way forward after end of the five-year Transition period for Compensation on June 30, as well as rationalization of tax rates in a phased manner as a multi-year goal due to inflationary concerns. As one may be aware, under the GST compensation mechanism, (which is constitutionally guaranteed,) state Governments are assured 14% annual revenue growth for the first five years from the appointed date of 01-07-2017. A decision to extend this or not is to be taken. Also, a much-awaited restructuring of the GST slabs to raise the revenue-neutral rate (RNR), from a little over 11% now to 15.5%, could start in a small way this year in areas not prone to inflation. The GST Council is also likely to consider enforcing a ministerial panel’s recommendations on data analytics to tighten compliance and scrutiny of GST returns to augment revenues by plugging leakages. 168 R. Srivatsan, IRS GST UPDATEZ ON 15-06-2022 GST UPDATEZ ON 18-06-2022 Unjust Enrichment on Export of Services The Honorable Bombay High Court has held that GST is not chargeable to the services rendered abroad as they amount to the export of services and categorised as Zero-Rated Supplies under Sec:16 of IGST Act 2017. 47th GSTC MEETING Click here to read full document

However, the department contended that the petitioner has admitted that even in the case of alleged unjust enrichment by the petitioner, the credit notes will nullify the effect of the same, and GST law does not contemplate any mechanism for paying back the GST by way of the issuance of credit notes. The court further observed that the ASCL is located outside of India and the petitioner company is located in India. The production services are rendered by the petitioner in the U.K. and the place of Supply is outside India. It is, thus, clear that the services rendered by the petitioner fall within the expression "export of services" and therefore GST does not apply to the services rendered abroad while refund is eligible. Well!...... As the supply is considered as a zero-rated supply, clearly, the principle of unjust enrichment does not apply to the services rendered by the petitioner and as rightly held by the honourable court they are lawfully entitled for refund. 169 R. Srivatsan, IRS The court allowed the GST refund to the petitioner. The core of the litigation involved is that the petitioner is in the business of providing production services to "A Suitable Company Ltd." (ASCL) located in London. The petitioner has entered into an agreement with ASCL for supplying such services. The important clause of the agreement provides that if any refund of tax component is received by the petitioner, the production expenses shall be reduced from the consideration while computing the total amount payable towards supply of production services. The petitioner received and used various input services for supplying production services to ASCL, on which applicable CGST/MSGST/IGST were paid/(borne the incidence) as charged by their vendors. In cases where the services were received from a service provider/ vendor located outside India CGST or IGST on such supplies was paid by the petitioner on RCM basis, based on the Place of Supply stipulations. While first refund application filed by the petitioner for the period from April to July, 2019, filed by the petitioner was allowed by the Assistant Commissioner another refund claim for the subsequent period of August 2019 to October 2019 was rejected on the ground that the incidence of tax has been passed on to the client, resulting in unjust enrichment of the petitioner. The appeal filed consequently was also dismissed, holding that if a refund were granted, it would amount to unjust enrichment. The petitioner contended that the principle of unjust enrichment does not apply to export services. The honourable court held that 1. the agreement clearly stipulates that if a refund is received, it shall be deducted from the expenses of production and 2. The principle of unjust enrichment does not apply to export services. GST UPDATEZ ON 19-06-2022 GST evasion in the name of quality marking on unbranded food brands is under scanner. GST exemption on unregistered food brands may be withdrawn. It is learnt that the GoM reviewing the GST rates has decided to remove exemption for packaged food items, if sold under unregistered brands. These items will henceforth be taxed at 5% like the rate for branded food. The move is in the wake of misuse of the exemption for unbranded food by a section of food processing industry, including rice and wheat millers in the name of internal Click here to read full document

All taxpayers who are engaged in the supply of selected goods or services other than exporters and composition taxpayers will collect compensation cess. This will also include compensation cess chargeable on certain goods imported to India. In case compensation cess is paid on exports, the exporter can claim refund of the same. The extension of Cess facilitates for paying off the loan, which was taken for all the states, for the compensation that could not be paid in 2020 and somewhat, not fully, paid in 2021. So, the amount collected from the extended cess will go towards payment of the compensation amount borrowed and the interest on it. So, Compensation Cess levy on notified supply of Goods / Services will continue till 31st March 2026. Adding on...... In my opinion, the extension does not mean that the States will be compensated for the loss of revenue even beyond 01.07.2022. One has to note that he definition of transition period still remains as five years from 01.07.2017, for which compensation is payable. So, this levy of Compensation CESS beyond 01.07.2022 would be used by the Central Government to meet the backlog between collection of compensation CESS and compensation payable for the five years up to 30.06.2022. More interesting developments awaited........ marking to indicate the quality variety, where revenue claims that these markings are nothing but the brand names. The company had claimed that these were not the brand names, but an “internal arrangement” to indicate the quality variety. Well… Deceptively, we also notice / realise while making purchases that these markings are nothing but brand names since the supplier has not forgone the actionable claim/ enforceable right and hence the way forward appears fair. Let's wait for the decision! 170 R. Srivatsan, IRS GST UPDATEZ ON 29-06-2022 Snap Shot of the 12 key Decisions taken by 47th GSTC GST UPDATEZ ON 25-06-2022 Levy of Compensation Cess extended The Government has decided to extend the levy and collection of Compensation Cess up to 31st March ‘26 In this regard a Notification No: 01/2022 - Comp.Cess, dt: 24-06-2022 has been issued in terms of the powers vested under subsection (2) of section 12 read with section 8 of the Goods and Services Tax (Compensation to States) Act, 2017, by notifying new rules called the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022 which shall come into force with effect from the 1st day of July, 2022 and will continue till 31st March 2026. GST Compensation Cess is levied by the Goods and Services Tax (Compensation to States) Act 2017. The objective of levying this cess is to compensate the states for the loss of revenue arising due to the implementation of GST on 1st July 2017 for a Transition period of five years or such period as recommended by the GST Council. Click here to read full document

171 R. Srivatsan, IRS 1.The 47th GST Council meeting was held at Chandigarh yesterday (28-06-2022) has been concluded today (29-06-2022) with the following decisions; 2.E-Way Bill for Intra-State movement of Gold to be decided by States. 3.GST Council to meet on 1st August to decide on Establishment of GST Appellate Tribunal. 4.GoM created for the establishment of GST Tribunal, Decision on 1st August. 5.Online Retailers below 40 Lakhs not required GST registration for Intra-State Transactions. 6.Council approved Report of GoM suggesting IT reforms GST Cess Collection will be used for Repayment of Loan till 2026. 7.Rate Changes on Certain Items Approved, will be Implemented from 18th July. 8.GST Council to meet on 1st August to decide Tax on Casinos. 9.GoM on Rate Rationalization Extended for Three more Months. 10.GoM on IT Reforms: 11.Permanent GoM to give Suggestions on GSTN GST Compensation Cess for States shall continue. 12.No Decision on 28% GST on Casinos, Online Gaming: GST Council asks GoM to file Report by 15th July. Detailed update will follow……… Gross GST collection in June 2022 is the second highest collection next only to the April 2022 collection of ₹1,67,540 crores. The gross GST revenue collected in the month of June 2022 is ₹1,44,616 crore of which CGST is ₹25,306 crore, SGST is ₹32,406 crore, IGST is ₹75,887 crore (including ₹40,102 crore collected on import of goods) and Cess is ₹11,018 crore (including ₹ 1,197 crore collected on import of goods). The revenues for the month of June 2022 are 56% higher than the GST revenues in the same month last year of ₹92,800 crore. During the month, revenues from import of goods was 55% higher and the revenues from domestic transaction (including import of services) are 56% higher than the revenues from these sources during the same month last year. The collection in June’2022 is not only be the second highest but also has broken the trend of being low collection month as observed in the past. Coupled with economic recovery, after pandemic, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST collections. The Gross compensation cess collection in this month is the highest since introduction of GST. The chart below shows trends in monthly gross GST revenues since 2017-18. Well......! The increase in state-wise collections compared to the same month last year is impressive as many large states have shown an increase in excess of 40 per cent. Since this comes in the backdrop of the guaranteed Compensation to states coming to an end, it would assuage many states who were worried about their revenue mobilisation ability in the post cess period. GST UPDATEZ ON 01-07-2022 GST Revenue collection for June 2022 is ₹1,44,616 crore

172 R. Srivatsan, IRS Well.... This should have come as a great relief to them as all confusions on account of this have been laid to rest. GST UPDATEZ ON 21-07-2022 e-Invoicing and SEZ GST UPDATEZ ON 06-07-2022 Notifications No: 10 to 14/2022, dated 05- 07-2022 has been issued giving effect to the various recommendations of the 47th GST Council meeting. Click here to read full document GST UPDATEZ ON 08-07-2022 GST System removes Negative Liability for Composition Taxpayers In a major relief to composition taxpayers the GSTN has removed negative liability/balance from the cash ledger. The concerned taxpayers can now verify and file the Annual Return in GSTR 4 for FY 2021-22 by 28th July 2022. Earlier, in April 2022 GSTIN requested the taxpayer to deposit the amount equal to the negative balance in the cash ledger urgently, in case there is a negative balance. And now, after reporting issues of the taxpayers, the system has removed this. Since FY 2019-2020, composition taxpayers have to pay the liability through Form GST CMP-08 on a quarterly basis while GSTR-4 Return is required to be filed on annual basis after the end of a financial year. A negative Liability Statement refers to a report available on the GST portal that shows any negative summary in Form CMP-08 for the present quarter that will be carried forward to the next quarter for adjustment against the next quarter’s liability. 47th GSTC had asked GSTN to expeditiously remove the negative liability and resolve the difficulties, which has been carried out now. GST UPDATEZ ON 20-07-2022 e Invoicing update GST e-invoicing has been enabled for taxpayers with turnover between Rs. 10 crore and Rs. 20 crores for testing on the Sandbox system. Those who are not aware, please note that Sandbox is a system where taxpayers can do the testing (with the test data) of a new feature before its actual implementation in the production or real data. Since the e-invoicing sandbox has been enabled for taxpayers between Rs.10 crore to Rs. 20 crores, it is presumed that indicates a notification for the same can also be issued very soon reducing the threshold limits from 20 Crore to 10 Crore. Therefore, Taxpayers with turnover between Rs.10 crore to Rs. 20 crores should be ready in the coming days to manage the same. Way forward as expected! What is the extent of impact that eInvoicing process has on SEZ scheme. While I traced back the evolution of eInvoice scheme, I found that according to the GST Notification (Central Tax) 61/2020 dated 30-7-2020 amended from time to time, SEZ Units (only

SEZ units) are exempted from issuing einvoices for their outward supplies. For SEZ Developers e-invoicing is applicable if they have specified turnover and fulfilling other conditions for einvoicing mandate. For Example, Let us consider that there is a SEZ unit, a SEZ developer and a regular DTA (Domestic Tariff Area) unit under the same legal entity i.e. having same PAN and the aggregate total turnover of the legal entity i.e. PAN is more than Rs. 20 Crores (considering all three GSTINs). In this scenario, the SEZ unit is exempt from e-invoicing, but e-invoicing will be applicable to DTA Unit as well as SEZ developer because the aggregate turnover of the legal entity, in this case, is more than Rs. 20 Crores. Thus, the eligibility is calculated on total annual aggregate turnover in case of a common PAN. If you are a recipient of supplies from SEZ units/developers, then one need to ensure that they identify SEZ Units and SEZ Developers as separate types. This is because only then you will be able to understand whether IRN should be present on invoice received or not. If your GSTIN fall under the e-invoicing mandate then all supplies to registered persons (B2B), Supplies to SEZs (with or without payment), Exports (with or without payment), and Deemed Exports are covered under the mandate. Thus, for a regular taxpayer supplier, even supplies made to SEZ units or developers will have an IRN (Invoice Reference Number i.e. e-Invoice) and QR code generated. 173 R. Srivatsan, IRS In a major relief to the taxpayers under the GST regime, the Supreme Court has directed to open the GST system enabling to claim transitional credit for two months. Earlier, various High Court have expressed a similar view and directed the Government to open the portal. Transition Form 1 or TRAN-1 is filed by those registered taxpayers who are eligible to avail the credit in Electronic Ledger with respect to eligible duties and taxes earlier paid on the inputs under the pre-GST regime. Now, the Honourable SC has passed the order giving the following directions to the Government; The first Direction is that the GST portal shall be open for all assesses to claim transitional credit for 60 days from 01.09.2022 till 30.10.2022 and that the benefit shall be provided to all the assesses to obtain the advantage whether they have filed petitions or not in various appellate forum. Secondly, the GSTN shall make sure that no technical glitches are arising during this time as most of the petitions, the taxpayers missed the deadline due to delay in filing the returns on ground of technical issues. Once the filing is completed, 90 days shall be given to the officers to verify the claim of credit on merits and pass appropriate order. This shall be in terms with the natural justice principles and the opportunity of hearing to be granted to the assessee to defend themselves in case of a possible adverse decision. Thereafter credit so allowed should reflect in Electronic Credit Ledger. The Court further directed the Central Board of Indirect Taxes and Customs (CBIC) to make further guidelines for facilitating smooth process. Well!!!...... GST UPDATEZ ON 22-07-2022 Supreme Court directs to Open GST portal for claiming Transitional Credit for two months

174 R. Srivatsan, IRS Looking back, If one can recollect earlier in January 2021 the honourable Supreme Court had dismissed the Special Leave Petition (SLP) (2021 (1) TMI 553 (Supreme Court) filed by the Department challenging the Delhi High Court’s direction (2019 (11) TMI 1248 (Delhi High Court) to open the Goods and Service Tax Network (GSTN) portal enabling the taxpayer to revise Form GST TRAN-01 or accept manual submission. The Supreme Court rejected the SLP filed by the Department on the grounds of delay and on merits. Apparently, the road map was ostensible as what was ahead! functions having huge gatherings except for limited members. As such, no business was done. Therefore, the petitioner applied for a cancellation of the GST registration. However, in response to an investigation, the petitioner gave a statement and furnished details of turnovers disclosed in GSTR 3B returns from July 2017 to March 2020. The department on conclusion of investigation, issued a Show Cause Notice proposing to levy IGST of Rs 18,00,000, CGST of Rs 26,55,000 and SGST of Rs 26,55,000 for conducting major events by the petitioner, based on the posts made in social media including face book. The petitioner appeared before the investigation officers of the department and obtained copies of the Facebook documents available with the department and explained that they have not conducted any events in respect of documents available on Facebook. They contended that the details and documents were uploaded only for advertisement purposes. The petitioner requested the department to make available the information, if any, conducted by them with other documentary evidences. The department did not provide any information except the Facebook documents. The petitioner submitted that the order passed by the Department without providing an opportunity of hearing is in violation of principles of natural justice. The assessment order passed was purely based on Facebook details and social media postings. In other words, without any event being conducted by the petitioner, the authorities have burdened him with liability. The department contended that many factual aspects are involved in this which have been shared and information has been gathered from the personal window of the petitioner, which clearly indicates that the petitioner has conducted many events without disclosing the same with the department for the purpose of negating Tax compliance. The court held that, prima facie, it cannot be said that the petitioner has not conducted any event during the relevant period and is not free GST UPDATEZ ON 26-07-2022 Blowing your Trumpet on social media could cost GST liability In a very interesting case, the Andhra Pradesh High Court, (Vasavi Wedding and Event Planners Vs State of Andhra Pradesh / Case No: W.P. No. 10250 of 2022, Dated: 14/07/2022) while considering a petition challenging GST demand based on events posted on social media, held that information available on the social media platform (Facebook) shows that the event was conducted recognizing supply of service. The petitioner is engaged in the business of Event Management supplies. It is said that the Effective Date of Registration (EDR) of the Petitioner is from 01.07.2017 and the registration was cancelled from 01.08.2020 on the application made by the Petitioner. The petitioner had filed GSTR 3B returns from July 2017 to January 2020, disclosing the taxable turnover and taxes paid. Due to personal reasons, the petitioner could not conduct event management except for small events up to January 2020 for livelihood. Due to COVID-19 from March 2020 up to August 2021, no permission was granted to conduct Click here to read full document

This is a clear impact of various measures taken by the Council in the past to ensure better compliance. Better reporting coupled with economic recovery has been having positive impact on the GST revenues on a consistent basis. During the month of June 2022, 7.45 crore e-way bills were generated, which was marginally higher than 7.36 crore in May 2022. The chart below shows trends in monthly gross GST revenues during the current year during the month of July 2022 as compared to July 2021 during FY-2021-22 and 2022-23. R. Srivastava, IRS Assistant Director NACIN, Chennai 167 from doubt. Also, it is not an issue covered under Article 226 of the constitution which empowers the Hon'ble High Courts to exercise power through issuance of writs – habeas corpus, mandamus, quo warranto, prohibition and certiorari or any appropriate writ and advised to petitioners to approach the Appellate Authority for redressal. Well…!!! Beware…. What is put in the Social Media is irreversible …… and additionally now would invite Tax litigations also !!!! GST UPDATEZ ON 01-08-2022 GST gross revenue collected in the month of July 2022 is ₹1,48,995 crore GST Revenue collection for July 2022 is the second highest ever & 28% higher than the revenues in the same month last year The gross GST revenue collected in the month of July 2022 is ₹1,48,995 crore of which CGST is ₹ 25,751 crore, SGST is ₹ 32,807 crore, IGST is ₹ 79,518 crore (including ₹ 41,420 crore collected on import of goods) and Compensation cess is ₹ 10,920 crore (including ₹ 995 crore collected on import of goods). This is second highest revenue since introduction of GST. The revenues for the month of July 2022 are 28% higher than the GST revenues in the same month last year of ₹ 1,16,393 crore. For five months in a row now, the monthly GST revenues have been more than ₹ 1.4 lakh crore, showing a steady increase every month. The growth in GST revenue till July 2022 over the same period last year is 35% and displays a very high buoyancy. GST UPDATEZ ON 02-08-2022 E-invoicing for taxpayers if Turnover crosses 10 Crores Starting from 01st October 2022, einvoicing will be mandatory for taxpayers whose Annual Aggregate Turnover is more than Rs.10 crore Rupees in any of the preceding financial years starting from 2017-18. The limit was earlier Rs.20 crore which has now been reduced to Rs. 10 crores. In this regard necessary Notification No. 17/2022 Central Tax, dated 01.08.2022 has been issued. GST UPDATEZ ON 03-08-2022 Introduction of Single Click Nil Filing of GSTR-1 175 R. Srivatsan, IRS Click here to read full document

In that case, the taxpayers are advised to delete already saved records or reset GSTR-1 data by clicking RESET button available on GSTR-1 dashboard before filing NIL GSTR-1. File Statement: To file Nil GSTR-1, taxpayer need to click File Statement button, which shall be available at the bottom of the GSTR-1 dashboard page. On clicking of ‘File Statement’ button, taxpayers will be navigated to the filing page to file GSTR-1/IFF using DSC/EVC. The Advisory can be accessed at: https://tutorial.gst.gov.in/downloads/ne ws/advisory_for_filing_nil_gstr_1_01_08 _2022.pdf Well!!!...... Every GST registered normal taxpayer must file a nil GSTR-1 even if no business activity occurs for a tax period. It also covers casual taxable persons, SEZ units and developers. This facility will definitely enable better and easier legislative compliance for the taxpayers. 176 R. Srivatsan, IRS The Goods and Services Tax Network (“GSTN”) has issued an Advisory dated August 02, 2022 on Single click Nil filing of GSTR-1 to improve the user experience and performance of GSTR-1/IFF filing. Registered Taxpayers can now file NIL GSTR-1 return by simply ticking the checkbox File NIL GSTR-1 available at GSTR-1 dashboard. Eligibility to file NIL GSTR-1: Taxpayers may file NIL GSTR-1 if they have: a. No Outward Supplies (including supplies on which tax is to be charged on reverse charge basis, zero rated supplies and deemed exports) during the month or quarter for which the form is being filed for, or b. No Amendments to be made to any of the supplies declared in an earlier form, c. No Credit or Debit Notes to be declared / amended, d. No details of advances received for services is to be declared or adjusted. Step by step process to file NIL GSTR-1: Taxpayers shall login to GST portal and navigate to online form GSTR-1 by selecting relevant GSTR-1 period in Returns dashboard (Services > Returns > Returns Dashboard > Form GSTR-1 > Prepare Online). Select File NIL GSTR-1 checkbox: In the GSTR-1 dashboard, a File NIL GSTR-1 checkbox shall be available at the top. If the taxpayer is eligible to file NIL GSTR-1, they can select the File NIL GSTR-1 checkbox. On click of the checkbox, system will show a note related to NIL filing and all the tiles/tables shall be hidden. Nil filing of GSTR-1will not be allowed in case there is already saved records in GSTR-1. GST UPDATEZ ON 05-08-2022 Clarification regarding taxability of 16 services are given in Circular - 177/09/2022-GST. The summary of those clarifications is given below: 1. Past cases of payment of GST on supply of ice-cream-by-ice-cream parlours @ 5% without ITC shall be treated as fully GST paid to avoid unnecessary litigation. With effect from 06th October 2021, the ice Cream parlours are required to pay GST on supply of ice-cream at the rate of 18% with ITC. 2. No GST on application fee charged for entrance or the fee charged for issuance of

177 R. Srivatsan, IRS eligibility certificate for admission or for issuance of migration certificate by educational institutions. 3. No GST on Storage or warehousing of cotton in ginned and or baled form because it is in the category of raw vegetable fibres such as cotton. It may however be noted that this exemption has been withdrawn w.e.f 18.07.2022 4. No GST on services associated with transit cargo both to and from Nepal and Bhutan. 5. GST exemption on sanitation and conservancy services supplied to Army and other Central and State Government departments is applicable only if they perform any functions listed in the 11th and 12th Schedule of the constitution, in the manner as a local authority does for the general public. 6. GST @ 5% applicable for selling of space for advertisement in souvenirs. 7. GST @ 12% from 18th July 2022 on the transport of minerals from mining pit head to railway siding beneficiation plant etc., by vehicles deployed with driver for a specific duration of time. Prior to 18th July 2022 GST @ 18% was applicable. 8. No GST on Preferential location charges (PLC) paid upfront in addition to the lease premium for long term lease of land constitute part of upfront amount charged for long term lease of land. 9. GST Applicable on services provided by the guest anchors in lieu of honorarium. 10. No GST on additional toll charges collected in the form of higher toll charges from vehicles not having fastag. 11. No GST on services in form of Assisted Reproductive Technology (ART)/ In vitro fertilization (IVF) 12. Service provided for the development of land, like levelling, laying of drainage lines (as may be received by developers) shall attract GST. 13. A body corporate shall not be liable to pay GST under RCM where it avails the passenger transport service for specific journeys or voyages and does not take vehicles on rent for any particular period of time. But GST under RCM shall be payable where the body corporate hires the motor vehicle (for transport of employees etc.) for a period of time, during which the motor vehicle shall be at the disposal of the body corporate. 14. Hiring of vehicles by firms for transportation of their employees to and from work will be taxable if the firm can decide the manner of usage (route and schedule) of the vehicle. 15. GST @ 18% from 18th July 2022 on supply of service of construction supply, installation and commissioning of dairy plant on turn-key basis. Prior to 18th July 2022 GST @ 12% was applicable 16. No GST on public as well privately owned ferries for transportation of passengers provided transport should be open to public owned. GST UPDATEZ ON 10-08-2022 Next GST Council meeting As there is a Delay in Group of Ministers (GoM) reports on online gaming, casinos and GST Appellate Tribunals the next meeting of the GST Council has pushed to probably last week of September 2022 now. It was initially scheduled to take place in the 2nd week of August 2022 The GoM, was formed by the Finance Ministry to review the GST rate for online gaming, casino, and horse racing, which was supposed to submit its final report on the issue before the second week of August 2022. On July 12, the GoM met to discuss the issue. However, the meeting didn’t reach any conclusion in deciding the GST rate due to Click here to read full document

178 R. Srivatsan, IRS absence of certain members and information at that time. Currently, the GST rate for online gaming is at 18%, whereas it is at 0% on contest entry fee. The GoM recommended that a 28% GST should be levied on online gaming with the full value of the consideration including the contest entry fee paid by the player for participation in such games. The stakeholders in the online gaming industry raised concerns over the hike in GST rate and many of them opined that such a steep tax rate would affect the business case, eventually leading to shutdown of many gaming startups. Although the final recommendations are still awaited, the 28% GST only on gross gaming revenue (GGR) rather than imposing a blanket 28% GST on online gaming will be a big boost for the industry. This is the practice that has always been followed everywhere and is also globally accepted. The GoM was in fact formed last year to examine the valuation issues of services provided by casinos, race courses and online gaming and if any change is required in the legal provisions to adopt any better means of valuation of the same. The next (48th) meeting of the Goods and Services Tax (GST) Council will be held in Madurai, Tamil Nadu. Besides New Delhi, Sri Nagar, Chandigarh, Udaipur, Lucknow, Panaji, Hyderabad and Guwahati have hosted the meetings so far. This is for the first time the meeting will be held in the Southern State of Tamil Nadu - Madurai Well!........ Adding to the rich history one more remarkable event at Madurai. Five shocking observations by CAG in relation to GST Refund: - 1) GST refunds pertaining to the period from July 2017 to September 2019 (Preautomation) received from 34 Commissionerate’s, CAG Audit noticed 410 instances of double payments owing to lack of reconciliation and monitoring amounting to ₹ 13.73 crore. 2) 552 cases out of sample of 12,283 refund cases processed, CAG noticed excess inadmissible refund of ₹185 crore was sanctioned due to various reasons such as ·incorrect computation of Adjusted Total Turnover ·ineligible accumulated ITC ·Claims time-barred etc. 3) CAG noticed significant number of refund cases where the Department did not adhere to the prescribed timelines for processing of refunds leading to instances of significant delay in issue of acknowledgement, deficiency memo and sanction of refund orders. 1) GST refunds pertaining to the period from July 2017 to September 2019 (Preautomation) received from 34 Commissionerate’s, CAG Audit noticed 410 instances of double payments owing to lack of reconciliation and monitoring amounting to ₹ 13.73 crore. 2) 552 cases out of sample of 12,283 refund cases processed, CAG noticed excess inadmissible refund of ₹185 crore was sanctioned due to various reasons such as ·incorrect computation of Adjusted Total Turnover ·ineligible accumulated ITC ·Claims time-barred etc. GST UPDATEZ ON 11-08-2022

3) CAG noticed significant number of refund cases where the Department did not adhere to the prescribed timelines for processing of refunds leading to instances of significant delay in issue of acknowledgement, deficiency memo and sanction of refund orders. Today i.e., 14.08.2022 is a very important date for issues relating to transactions under Service Tax regime and its recoveries. The time limit for issuing SCN in service tax for the quarterly period AprilJune 2017 just before the dawn of GST from July 2017, by invoking the extended period of demand ends today. No more SCNs can be issued under Service Tax by invoking extended period of demand anymore. As one may be aware in terms of Notification No. 18/2017- Service Tax, dt: 22-06-2017, it seeks to amend the Rule 7 and & 7B of the Service Tax Rules 1994 so that Service tax return for the period April 2017 to June 2017 is to be filed on or before 15th of August 2017 and revised service tax return if required within 45 days from the date of filing the original return. Of course if ST-3 return has been filed belatedly in those cases, SCNs can still be issued, of course to a limited extent of nondeclaration as the relevant date in those cases is 5 years from the date of filing the return. But generally, it can be construed, that the Sun has set!!!!! 179 R. Srivatsan, IRS Formation of GST appellate tribunals finalised by GoM A group of ministers (GoM) set up by the GST Council headed by Haryana deputy chief minister Dushyant Chautala has cleared the framework for setting up appellate tribunals to hear disputes and is likely to submit its report to the GST Council and the final call on recommendations will be taken by the GST council when it meets in September 2022 at Madurai. Accordingly, the six-member GoM has proposed to recommend the following inter-alia: - The principal bench of the GST Appellate Tribunal (GSTAT) is proposed to be set up in New Delhi, while large states can have up to five benches. The GoM has agreed with states on relaxing the experience criterion for appointment of technical members (25 years earlier as per Council draft). It has also allowed states to have more than one bench, based on population, (or) number of registered and active GST users. An amendment to Section 110 of the Act, replacing the word ‘Government’ with ‘State Government.’ to allow state governments also to relax the experience condition in appointment of members. Once the GoM's recommendations are accepted by the council appellate bodies can be set up in states and UTs. It is also proposed that a four-member search and selection committee will be set up for the appointment of members to the benches. The GST Council had earlier proposed that each regional bench consists of a judicial officer equivalent to a high court judge, and a senior tax officer from either the Centre or state as a technical member. GST UPDATEZ ON 14-08-2022 Significance of 14-08-2022 for Service Tax GST UPDATEZ ON 23-08-2022

180 R. Srivatsan, IRS The appellate body will be headed by former Supreme Court judges or high court chief justices. The business entities have repeatedly raised the need for GSTATs flagging the urgency to expedite disposal of cases. In the absence of these tribunals GST disputes were going straight to the high courts after adjudication by officials, creating delays and dragging out disputes. Well...... For five years have been completed, and several interpretational issues have cropped up it is essential that GST tribunals begin functioning soon with an adequate number of benches. As the old adage goes, “Justice delayed is Justice denied”. Hence, to allay the concerns setting-up of GSTAT on top priority is a MUST without further delay!!!!! The applicant submitted its reply within the time period granted in the said notice questioning the authority of the Assistant Commissioner, to initiate proceedings for cancellation of registration. It is the case of the writ applicant that in absence of proper intimation by the respondent authority, the writ applicant on his own appeared before the concerned Officer thereby drawing attention about the objections raised by the writ applicant. However, the Assistant Commissioner, without considering the objections raised by the writ applicant, passed the order dated 18.01.2022 cancelling the registration of the writ applicant firm. The sole reason assigned by the Assistant Commissioner in the said order of cancellation reads thus: “1. No clarification against SCN is submitted. So, cancellation order u/s 29 read with rule 21 for cancellation of GSTN w.e.f 10.09.2020 is send by RPAD bearing o/w no. 4828 dated 18.01.2022” Being aggrieved by the aforesaid illegal action of the respondent authority cancelling the registration of the writ applicant firm, the writ applicant has approached this Court by way of this writ application. It was held by the honourable High Court of Gujarat that “On bare perusal of the contents of the show cause notice as well as the impugned order, we find that the said show cause notice is absolutely vague, bereft of any material particulars and the impugned order is also vague and a nonspeaking order.” It cannot be disputed that with cancellation of registration, the dealer is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only is the order non-speaking but cryptic in nature and the reason of cancellation not decipherable there from.In such circumstances, the principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences. GST UPDATEZ ON 25-08-2022 Cancellation of GST Registration by a vague, non-speaking and cryptic order set aside by Gujarat High Court The point of Dispute in the case of "Singh Traders vs State of Gujarat" vide Writ Petition No: - 6325/2022, is that, the applicant was served a show cause notice issued by the Assistant Commissioner, which simply states the reason for issuance of the notice, read as under: “Issues any invoice or bills without supply of goods and/or services in violation of the provisions of this Act, or the rules thereunder leading to wrongful availment of input tax credit or refund of tax.”

R. Srivatsan, IRS Assistant Director NACIN, Chennai 181 Therefore, the Court ordered to quash and set aside the show cause notice & order and remitted the matter back for denovo proceedings in accordance with law. Well.......Reasoned Order is the order of the day!!!! GST UPDATEZ ON 26-08-2022 GST UPDATEZ ON 26-08-2022 The scrutiny of monthly returns filed by tax payers under the Tamil Nadu Goods and Services Tax Act, 2017, it is revealed that some tax payers either didn’t pay the tax in cash after claiming the input tax or paid less than Rs.1000. Thus, in order to ascertain the reason for not paying any tax or paying lesser tax and to know the true status of the transactions of these tax payers, inspection have been conducted by the TN-SGST in 368 cases to verify tax evasion. During such inspection, tax evasion of Rs.383.87 crore has been detected in the previous months of June, July and up to 15th August, out of which an amount of Rs.33.67 crore has been collected. Further, bill traders were identified in 31 cases and action has been initiated to prevent the beneficiaries from taking the input tax credit of Rs.57.21 crore. Further, continuous action is being taken in these cases to prevent illicit transactions. Well...... Big data analytics and Artificial intelligence will come handy to arrest these types of evasion. GST UPDATEZ ON 26-08-2022 Government approaches SC for grant of one month extension to open GST Portal for enabling filing of transitional credit claim Earlier on 22nd July 2022 if one could remember the Honourable SC has passed an order giving the following directions to the Government: The first Direction is that the GST portal shall be open for all assesses to claim transitional credit for 60 days from 01.09.2022 till 30.10.2022 and that the benefit shall be provided to all the assesses to obtain the advantage whether they have filed petitions or not in various appellate forum. Secondly, the GSTN shall make sure that no technical glitches are arising during this time as most of the petitions, the taxpayers missed the deadline due to delay in filing the returns on ground of technical issues. Once the filing is completed, 90 days shall be given to the officers to verify the claim of credit on merits and pass appropriate order. This shall be in terms with the natural justice principles and the opportunity of hearing to be granted to the assessee to defend themselves in case of a possible adverse decision. Thereafter credit so allowed should reflect in Electronic Credit Ledger. The Court further directed the Central Board of Indirect Taxes and Customs (CBIC) to make further guidelines for facilitating smooth process. In the light of the above, now, the Centre has filed a miscellaneous application for a limited purpose seeking extension of time to ensure that the web portal is ready in all respects for implementation of the order passed by the Apex Court earlier. It should be the endeavour Click here to read full document

All at least now to ensure that the directions of this Court get implemented in toto, free from errors and with the best efforts. Earlier, the Court ordered that the portal be opened for 60 days, from September 1 to October 31. Now, the application seeks direction to GSTN to open window for 60 days between October 1 and December 31. GSTN also feels that it has limited time to make changes in the portal to facilitate filing. Well…...! All is well that ends well!!!!! 182 R. Srivatsan, IRS However, it has to be noted that for cancelling bookings of a particular class the GST rate will be the same as that applicable while booking seats/berths for that class. For quick understanding it can be explained with an example Let's assume that the rate is 5% for firstclass or AC coaches while cancellation fee for this category is ₹240 (per passenger). Now, therefore, the total cancellation cost will be ₹252 (₹12 GST [240x5%] + ₹240) for first-class/AC compartments. However, one should very clearly note that there is no GST on other categories, where the cost of transport of passengers attracts Nil GST including second sleeper class. Well...... Now there will not be any misconceptions that GST is all pervasive....... GST UPDATEZ ON 30-08-2022 GST to be levied on cancellation of confirmed train ticket Cancellation of confirmed train tickets, will attract GST on cancellation charges for that particular class of travel as per circular issued by CBIC on 03rd August 2022. The GST will be calculated on cancellation charges for the class of travel under which the journey was to be undertaken. It has to be understood that booking of tickets is a ‘contract’, under which the service provider (either IRCTC/Indian Railways as the case may be....) promises to provide services to the customer. When the contract is breached by the passenger in the case of Tickets cancellation, the service provider is compensated with a small pre-determined amount, collected as a cancellation charge. Since the cancellation charge is a payment and not breach of contract it will attract GST the circular Contends. GST UPDATEZ ON 01-09-2022 GST gross revenue for August 2022 is ₹ 1,43,612 crore To put more details the gross GST revenue collected in the month of August 2022 is ₹ 1,43,612 crore of which CGST is ₹ 24,710 crore, SGST is ₹ 30,951 crore, IGST is ₹ 77,782 crore (including ₹ 42,067 crore collected on import of goods) and Comp. Cess is ₹ 10,168 crore (including ₹ 1,018 crore collected on import of goods). The revenues for the month of August 2022 are 28% higher than the GST revenues in the same month last year which was ₹ 1,12,020 crore. It is remarkable to note here that for six months in a row now the monthly GST revenues have been more than the ₹ 1.4 lakh crore mark.

the hearing aids with no other alternate uses and accordingly, are classifiable under heading 90219010 only which are exempted from GST in terms of S.No. 142 of Notification 2/2017-Central Tax (Rate) dated June 28, 2017. The Authority after carefully going through all the facts and arguments, opined it is clearly evident from the entry no. 142 that the said entry covers only goods described as “hearing aids” and not the “parts & accessories of the hearing aids”. Thus, the exemption entry is not applicable to the instant case, while the rate of tax applicable on supply of such parts and accessories of hearing aids is 18%. The notes to the relevant chapter-90, clearly states that parts of hearing aids merit their classification in the respective heading only and hence, by implication, will not be subject to exemption, which is available for hearing aids and parts & accessories shall be subject to 18 per cent GST. Well....... Classification of goods continues to be a vexed issue under the GST laws and the supplier of such commodities needs to be very careful while selecting the appropriate category or HSN code. It is time and again emphasised that the taxpayers (both supplier/recipient) choose right HSN to avoid any dispute with reference to tax liabilities and ITC eligibilities Is there anyone hearing? 183 R. Srivatsan, IRS The growth in GST revenue till August 2022 over the same period last year is 33%, continuing to display very high buoyancy. This is a clear impact of various measures taken by the Council in the past coupled with economic recovery has been having positive impact on the GST revenues on a consistent basis. The chart below shows trends in monthly gross GST revenues during the current year. Well...... Brighter prospects in- store? GST UPDATEZ ON 02-09-2022 Classification of Supply of Goods - Hearing aid is exempted from GST not its parts and Accessories. GST UPDATEZ ON 03-09-2022 Hon'ble SC gives Government 30 more days for opening of GST portal to resolve Tran-1 issues M/s. Sivantos India Pvt. Limited is engaged in the business of trading of hearing aids and their parts and accessories to the domestic market, which are manufactured by their parent company abroad imported by the business entity and are said to be suitable for use solely with the hearing aids. The company moved to Karnataka AAR with the following three questions. First, what would be the classification of parts and accessories suitable for use solely with the hearing aids. Second, what would be the rate of tax on supply of such parts and accessories and third, whether such parts and accessories are exempted by virtue of exemption for the hearing aids. Though, the applicant is charging GST at the rate of 18 per cent on parts and accessories, it contended that the said parts and accessories are designed by their parent company to make them suitable for use solely, (tailor made) with Click here to read full document

The Supreme Court on 02-09-2022, (Friday) gave the finance ministry a further extension of 30 days for opening of the GST common portal in terms of their prayer. It also directed the GSTN to open the portal for 60 days from October 1 till December 31 so as to “give full effect” to its order dated 22nd July 2022 that had allowed taxpayers to claim accumulated ITC accrued in the pre-GST indirect tax regime in 60 days ending October 31. To trace back the recent progress, pursuant to the SC order, the sequence of events had changed in TRAN 1 and TRAN 2 filings and this now involves a different business process and the new development is necessary both at front office (taxpayer facing front) and back office (tax officer facing front). It is a fact that many changes have taken place in the GST system over the last five years which have to be kept in view to ensure the new IT development is consistent with the current state of the IT system and in line with the SC directions. On this pretext, the extension sought by the Ministry has been now considered favourably by the honourable SC. Well...... Benevolence in the interest of rendering justice. 184 R. Srivatsan, IRS milk after classifying it under beverages. Interestingly, while milk is exempt from tax, flavoured milk as a beverage would attract 12 per cent GST. Even more interestingly, yoghurt and flavoured lassi, both milk products, are exempted from tax. Similarly, a Noida-based company sought a ruling on “breaded cheese” arguing that it should attract 12 per cent GST as it is a cheese item. However, the UP AAR recently said that as the item is transformed into a snack whose ingredients are cheese, flour and potato, it will be categorised as a snack – which attracts 18 per cent GST. Another example is of Dabur Odomos which has been used as a mosquito repellent for years. But the company decided to question its classification as a mosquito repellent – which attracts 18 per cent GST – and wanted to get it classified as a medicament, which would attract just 12 per cent GST. The Uttar Pradesh AAR however, dismissed the proposal while holding that as the special odour of the ointment helps in repelling mosquitoes, it would be called a repellent and not a medicament. In other words, the court ruled that the ointment cannot be considered a medicine as it is not meant for human beings, but directed at mosquito menace. Another example is of Dabur Odomos which has been used as a mosquito repellent for years. But the company decided to question its classification as a mosquito repellent – which attracts 18 per cent GST – and wanted to get it classified as a medicament, which would attract just 12 per cent GST. The Uttar Pradesh AAR however, dismissed the proposal while holding that as the special odour of the ointment helps in repelling mosquitoes, it would be called a repellent and not a medicament. In other words, the court ruled that the ointment cannot be considered a medicine as it is not meant for human beings, but directed at mosquito menace. GST UPDATEZ ON 15-09-2022 Litigations on Classification of Goods under GST The Appellate Authority of Advance Ruling (AAAR) recently upheld the Gujarat Authority of Advance Ruling’s (AAR) decree that flavoured milk will not be considered as milk, but as a beverage, even though milk is a key ingredient in its preparation. The ruling came after ice cream major Validal challenged the AAR’s ruling which ordered GST to be applied to the company’s flavoured

185 R. Srivatsan, IRS order passed under Section 129(1) of the Act. Well...... One more reason to form the tribunals urgently. GST UPDATEZ ON 16-09-2022 Discrepancy in E-Way Bill is a ‘Question of Fact’, Writ Jurisdiction cannot be Invoked in High Court GST UPDATEZ ON 19-09-2022 Next GST Council meeting The Calcutta High Court held that the discrepancy in the e-way bill which is a question of fact and for that Writ Jurisdiction cannot be invoked. The petitioner had challenged the impugned order passed by the respondent GST authority, under Section 129(1) of the CGST Act and WBSGST Act, 2017 dated 10th August 2022. The Physical verification of goods was made and 312 cubic feet of team-sawn timber was found more than what has been declared in the e-way bill and invoice. Physical checking also revealed that the measurement details of the teak-sawn timber were not in coherence with the measurement slip produced by the driver. Completion of physical verification on 10.08.2022 unfolded that the vehicle was carrying a separate consignment of “Teak Sawn Timber” which is different in size, shape and quantity from that mentioned in the submitted tax invoice, e-way bill and Certificate of Forest Department. It was observed that the question of fact about registration of the “Teak Sawn Timber” not tallying with the declaration made in the E-way bill and invoices can’t exercise through a writ petition. Justice while dismissing the writ petition, held that it cannot act as a fact-finding and verification authority over transporting the goods in question and ordered the petitioner to appeal before under Section 107 of the Act if he is not satisfied with the reasons given for detention of the goods in question and the The 48th meeting of the GST Council is likely to take place only next month as one of two Group of Ministers (GoM) is yet to submit its report. One GoM is on Goods and Service Tax Appellate Tribunal has finalised and submitted its report. GoM on GST Appellate Tribunal, chaired by Haryana deputy chief minister Dushyant Chautala, recommended that states can relax the experience criteria necessary for the appointment of officers as technical members in the panel. The group also recommended that bigger states such as Uttar Pradesh can have more than one appellate authority, with a maximum of five such bodies. The six-member body that met in Bhubaneswar last month also recommended that the section in the Central GST Act, 2017 should be amended suitably to facilitate quicker formation of the appellate tribunals. However, the second GoM on online gaming, casinos and horse racing is yet to arrive at a consensus, delaying the final report. It appears that the GoM is reworking its report after the GST Council suggested that it should fine tune its recommendation. In the earlier report, the GoM recommended a uniform 28 per cent rate on online gaming, casinos and horse racing.

186 R. Srivatsan, IRS For valuation in case of online gaming, it was suggested GST to be levied on full value of the consideration by whatever name including contest entry fee paid by the player without making any distinction between such as games of skill or chance. In case of casinos GST was recommended to be applied on full face value of the chips/coins purchased from casinos by a player. But these recommendations are likely to undergo a change as there have been a number of court rulings for and against. Normally, the GST Council meets at least once in three months. The last meeting (47th) took place in 28-29th June 2022 at Chandigarh. However, it is not the first time when three months period is going to end without a meeting. Earlier, there was gap of over 6 months between the 42nd (October 2020) and 43rd (May 2021) meeting. But that was during the grip of pandemic. The 48th meeting has been agreed and scheduled to be hosted at the temple City of Madurai possibly in October 2022. Acceptance was issued to the petitioner by the respondent. (Railways) The General Conditions of Contract (GCC) provide for the payment of service tax. It says, "As & when it was notified for collection of service tax on commercial publicity contracts on railways, the contractor should pay the service tax at the applicable rates on the license fee to the Railway Administration. The petitioner was paying the applicable service tax regularly without default. In July, 2017, the service tax regime was replaced by Goods and Services Tax (GST)— Central GST and State GST for intra state supplies. As was done in the past, the petitioner continued to pay the amount to the respondent together with a GST component of 18% on the value of the services supplied. The fact that the petitioner made the payments to railways, together with the GST of 18% per annum, *has been admitted by the respondent Railways. The last assignment that the petitioner had with the railways was for the Financial Year 2017-18. During December 21, 2020, the petitioner received a notice from the Deputy Commissioner of State Tax for conducting an audit. The petitioner was directed to attend in person or through an authorised representative along with the books of accounts and records for the Financial Year 2017-18. The petitioner responded by submitting the requisite documents and by answering all the queries of the audit team. During the course of the audit, the petitioner realised that the issue was related to the amount of GST that the petitioner had paid to the railways. The petitioner realised that though he was paying 18% GST to the railways, that amount was not being paid by the railways to the concerned authorities, i.e., 9% to the Central Government and 9% to the State Government. GST UPDATEZ ON 19-09-2022 Bonafide Mistakes of a taxpayer should be given due credence The honourable Bombay High Court has held that the taxpayer has made a mistake and instead of paying the Government of India through the GST authorities the entire tax amount was paid to the Government of India through Indian Railways. The division bench has directed that the amounts which have been wrongly paid to railways should be paid to the GST authorities within two weeks to undo the mistake. The crux of the matter is that the petitioner is in the business of advertising and providing advertising solutions to various parties. The petitioner submitted a bid in response to a tender floated by the respondent. The petitioner's bid was accepted and a Letter of

187 R. Srivatsan, IRS The court held that the petitioner had not attempted to evade any tax. The order of the Court went on to say.... "As and when the railway deposits the amount, and we have already observed that it will be done within two weeks from today, the CGST and SGST authorities will give an input tax credit to Petitioner," Well....Benevolent though.... Judicial RCM!!!!! Acceptable????? IGST paid on imports will also appear in GSTR-2B and other eligible input tax credits and can be claimed by the taxpayer. When the bills of entry are not imported in the portal the taxpayer is given the option to search for the bill of entry manually. Steps to search for BoE on the GST portal: Step 1: Log in to the GST portal: Taxpayers must log in to use this functionality. After logging in, the taxpayer can find the functionality by clicking Services >> User Services >> Search BoE. The search BoE page will be displayed. Step 2 – Entering the details: The taxpayer can search for the bill of entry on the Search BoE page. The taxpayer must possess 1. the bill of entry number, 2. port code, 3. bill of entry date, 4. the reference date. The reference date is when the Customs clears the goods on payment of all dues. It may be the late out-of-charge date, duty payment date, or amendment date. Step 3 – Search BoE: The taxpayer can click on search after entering the respective details. This will display the BoE data as received by the GST system from ICEGATE under the following headings: GSTR-2A period of the bill BoE details – BoE number, port code, BoE date, the reference date, the taxable value of supply Tax details – IGST, and cess. Step 4 – View History of BoE: The taxpayer can view the BoE history per ICEGATE by clicking on History of ICEGATE. This will fetch details of BoE from ICEGATE GST UPDATEZ ON 21-09-2022 Bill of Entry not reflected in GSTR2B What to do? Importers of Goods who pay IGST on Reverse Charge can claim ITC of IGST and cess paid on their imports only after issuing the bill of entry (BoE). Hence, taxpayers must access the bill of entry on the portal to avail input tax credit seamlessly. The GST Network (GSTN) provides a framework to taxpayers for finding the relevant bill of entry. At times Bill of Entry (BoE) is not reflected in GSTR-2B, and hence the taxpayer cannot claim Input Tax Credit (ITC) of inward supplies not reflected in GSTR-2B. Search Bill of Entry functionality: - Taxpayers who have paid IGST on their imports can claim the input tax credit on such taxes by checking in new tab namely Import of goods from overseas on the bill of entry’ and ‘Import of goods from SEZ units/developers on the bill of entry’, made available under Part-D in GSTR-2A. The BoEs auto-populates from ICEGATE in these tabs.

188 R. Srivatsan, IRS and display them along with the status of the BoE. Step 5 – Query on ICEGATE: If the BoE results are not displayed on searching the details, the taxpayer can click on Query ICEGATE. This will try to fetch the latest BoE record from ICEGATE based on the details entered and prompt to search again after 30 minutes. If the record is found on ICEGATE, the same will reflect on search BoE, GSTR-2A and GSTR-2B. Step 6 – Raise Ticket: The taxpayer can raise a ticket on the GST self-service portal or GST helpdesk if the portal does not display the BoE in case, they face any problem. The following details are to be furnished in the ticket: BoE details – 1. GSTIN, 2. BoE number, 3. BoE date, 4. Port code and 5. Reference date. Screenshot of BoE record on ICEGATE may be provided for any other error or problem encountered by the taxpayer with the Search BoE functionality on the GST portal. Well.... These proactive facilities are already available on the portal but unfortunately the awareness of such functionalities is not there amongst the stakeholders. Historically, the issue regarding transportation of staff / workers by non-ac buses by employer company has been a subject matter of discussions / deliberations ever since inception of the GST regime. The matter was a point of dispute in Service tax regime also triggering various audit objections and demands. The never-ending debate and litigations on availability of exemption in such cases increase the difficulty levels of the taxpayer manifolds. There are a number of AAR decisions on the subject matter and one on similar lines rendered by Maharashtra AAR and quoted here is in the case of M/S SHAILESH RAMSUNDER PANDE wherein the assessee was having confusion as regards to taxability in case non-AC buses are used for transportation of staff under contract carriage. In the said case, the applicant had entered into an agreement with Ratan Indian Power Limited (RIPL) for the aforementioned transaction wherein the buses will be operated strictly as per the instructions of RIPL. It was concluded by AAR that since the consideration of service is charged from RIPL and not the passengers the subject activity falls under “renting of motor vehicles” and therefore, is taxable. It was stated that the essential ingredient of contract carriage is that it piles under a contract for fixed set of passengers and does not allow passenger to board at their will. Hence, AAR ruled that the services provided by the applicant falls under renting of motor vehicles under Serial No. 10 of the notification no. 11/2017-CT (Rate) dated 28.06.2017 attracting GST at the rate of 5% without ITC under Reverse Charge Mechanism or 12 % GST with ITC facility under Forward Charge Mechanism. The above advance ruling is in alignment with the recent CBIC Circular No. 177/09/2022-TRU dated 03.08.2022 clarifying the said issue. Aligning with the above decision, GST UPDATEZ ON 23-09-2022 Dispute regarding transportation of staff by non-ac busses of company

has been issued by the CBIC which is also in line with recommendation of 47th GST Council meeting wherein it is clarified that 1) in case of renting of motor vehicle for transportation of passenger which is hired by body corporate for a particular period of time with the directions of operation of the vehicle to be given by body corporate, the said services shall fall under “renting of motor vehicle” and will be covered under RCM wherein the tax shall be paid by the body corporate. On the contrary, 2. if in case the body corporate avails passenger transportation services over pre-determined routes on pre-determined schedules, it will be classifiable under “passenger transport services” liable to GST under forward charge and the body corporate shall not be liable to pay tax under RCM. Well...... The above clarificatory circulars will be helpful for the taxpayers avoid existing litigations and confusions in their minds which will prove to be useful for the taxpayers and officers as well. 189 R. Srivatsan, IRS The show cause notice issued is for the period between 01st June 2017 and 30 June, 2022. The crux of the matter is that, Gameskraft Technology has been accused of promoting online betting through card, casual and fantasy games such as Rummy Culture, Gamezy, Rummy Time etc. Further, it was also found that Gameskraft was not issuing any invoices to its customers for Supply of Taxable services. In the show cause cum demand notice, the GST officials have slapped 28% tax on betting amount of around Rs. 77,000 crores. Though it has been defended by the Noticee that GTPL was engaged only in the betting by allowing its players/gamers to place bets in the form of money stakes on outcome of card games played online, which requires to be taxed only at 18%. and not 28% It was also unearthed during investigation, the gaming platform submitted fake/back dates invoices, which was caught by forensic examination, and that the company was also inducing its customers to betting as there was no way of return once the money was added in the wallet. Games of skill are a constitutionally protected activity per the Supreme Court and various High Courts across the country. Rummy is one such game declared to be a skill game like horse racing, bridge and fantasy games. Therefore, the notice can be defended to be a departure from the well-established law of the land. Well.... As one may already be aware, an interministerial committee established by the Central government has been mandated to recommend a uniform regulatory regime for the online gaming industry considering various aspects like promotion of the industry, player protection, ease of doing business etc. For this, the GST council has also has set up a Group of Ministers (GoM) to frame guidelines to decide the taxability and quantum of levy of GST on similar activity, which is yet to table its report to GST Council. GST UPDATEZ ON 26-09-2022 GST Department issues biggest-ever show cause notice The GST Intelligence unit (Bengaluru) has issued a show cause notice to a Bengalurubased online gaming startup Gameskraft Technology (GTPL), in what appears to be the biggest show cause notice in the history of indirect taxation, in terms of tax demand. The notice pertains to the company not paying Goods and Services Tax (GST) to the tune of Rs 21,000 crore, for a five-year period. Click here to read full document

The commerce and industry ministry had earlier announced that it will release the new FTP 2022-2027 by the end of this month and was in fact scheduled for release on 29-09-2022 at New Delhi, to take effect from 01st October 2022. Well...... Optimistically, have reason to believe that it is in the interest of economic factors and export community! 190 R. Srivatsan, IRS The market value of the Indian skill gaming sector according to trustable estimates is around Rs 79 billion in the financial year (FY) 2021-22 and may reach Rs 150 billion in FY 2023-24. The sector contributed around Rs 15 billion in 2020 to the government exchequer and the same is expected to reach about Rs 50 billion by 2025. So, it is imperative to get taxation policy right and cannot take CHANCE for inviting protracted legal battle GST UPDATEZ ON 27-09-2022 FTP -2015-20 to be extended till March 2023 The Government of India has decided to extend Foreign Trade Policy 2015-2022 by 6 months upto 31st March 2023. The current Foreign Trade Policy (FTP) was to end on 30th September 2022. The Department of Commerce announced that there were demands from different quarters, including industry associations and export promotion councils, to extend the policy and not introduce a new policy at this middle time of the year. It has been stated that currently there are challenges like global uncertainties, slow paced Global economic recoveries after pandemic and currency fluctuations. Therefore, it has been decided that this may not be the appropriate time to introduce new schemes as part of FTP 2022-2027. There was also a view to align the rollout of the new policy with the new financial year 2023-24 which may be logical from accounting point of view. GST UPDATEZ ON 28-09-2022 No penalty for movement of vehicle in wrong direction The petitioner was a transporter and engaged in transportation of stainless-steel coils and plates from Mumbai to Bengaluru accompanied with all requisite documents including Tax invoice and valid E-way bill. The lorry was carrying four (04) consignments out of which one was under transit. The driver of lorry mistakenly took wrong route i.e. instead of right, he took left at a point. The vehicle was intercepted by authorised officers in transit. It was stated that the goods were moved without proper documents and thereby penalty was imposed for the same. The petitioner submitted that the driver mistakenly took wrong turn at 11:00 p.m. in the dark of night and before the error could be realised, the vehicle was seized and checked. It was argued that it is a human error committed without any intention to deceive. Further, the driver had furnished affidavit in this regard and communication was also received from the purchasers of the consignments. The respondent argued that looking at the present situation, it seems that the diversion of