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Home e-Newsletters Index Year 2020 July Day 17 - Friday

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TMI Tax Updates - e-Newsletter
July 17, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws



TMI SMS


Highlights / Catch Notes

    GST

  • Classification of Services - rate of tax - applicant agreed for construction work namely “Construction of Building for Office space/IT space at IT park, Mangalgiri as awarded by APIIC - the applicant did not provide any information or documentary proof evidencing that the construction/ building is for use other than for commerce, industry, or any other business or profession to be eligible for concessional rate of 12%.

  • Governmental Authority/entity or not - APIIC which awarded construction work to the applicant - the Government of Andhra Pradesh including its nominees is having 100% of share holding and thus it is covered under the definition of 'Government Entity' under the above said provisions. - M/s APIIC is a “Government Entity” for the purpose of GST matters.

  • Liability of GST - medicines supplied to In-patients through pharmacy - the food supplied to in-patients is part of composite supply of health care and not separately taxable, whereas other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable - the same principle is applicable to the medicines, drugs, stents, implants etc administered to in-patients during the medical treatment or procedure.

  • Rate of GST - Pure service or not - the services provided by the Contractor are pure services of “Operation and Maintenance” of plant devoid of any supply of material or goods in the due process. The services under question fall under Heading 9987 “Maintenance repair and installation (except construction) Services” attracting tax rate of 18%.

  • Governmental Authority or not - The Board of the applicant i.e., “Sri Satya Sai Water Supply Project Board” consists of 9 Members, out of which 7 are officers /Employees of the Government of Andhra Pradesh that qualifies for 77% of Government control falling short of the designated 90% as required by the Act. Even the cost of the operation and maintenance of the water supply scheme is contributed at a ratio of 70% by the State Government, while 30% of the cost is being borne by the applicant from the water charges collected from the users - In the instant case the applicant falls short of the qualifying mark of 90% in terms of equity or control. Hence the applicant does not fit in the category of “Governmental authority”.

  • Classification of services - Rate of GST - Works Contract Service - construction service - As the purpose of the construction / building is meant for accommodating Small and Medium Enterprises (SMEs) and Startups, which are not other than for commerce, industry, or any other business or profession, the concessional rate of 12% is not available to the applicant.

  • Rate of GST - tobacco leaves - the leaves as long as they do not loose their basic character as 'leaves', shall be considered as tobacco leaves only - Rate of GST on tobacco leaves (butted or re-dried) is 5% - Rate of GST will be 28% if the applicant gets the tobacco leaves threshed and re-dried.

  • Income Tax

  • Estimation of commission income on accommodation entries - while deciding identical issue in assessee’s own case, the Tribunal, has upheld estimation of commission income @ 1% of the total turnover - Matter restored before CIT(A) for fresh decision.

  • Revision u/s 263 - It is evident from the above that the Commissioner is not empowered to exercise his jurisdiction on an issue which is subject matter of appeal before the CIT(A).

  • Disallowance of various expenses on ad hoc basis - While scrutinizing the expenditure if the expenses claimed are not having any nexus to the business of the assessee or if there is deficiency in the vouchers or there is no bills supporting the incurrence of an expenditure, at the most expenses to the extent that are not supported by the vouchers can be held to be non-genuine and can be disallowed by the AO; and item-wise the AO could have disallowed the expenditure rather than going for adhoc disallowance of percentage basis of the expenses claimed by the assessee which action of the AO is arbitrary in nature and cannot be sustained.

  • Reopening of assessment - information received from INV Wing - Documents and evidences have not been examined by the Assessing Officer and had he examined these documents/evidences or made necessary enquiries, he may not have issued notice u/s 148 of the Act but for non-application of mind, the assessment was reopened.

  • Correct head of income - The Tribunal thereafter on the basis of meticulous appreciation of evidence on record has recorded a finding that assessee has rightly disclosed the income from the property as long term capital gains instead of business income. The aforesaid finding by no stretch of imagination can be believed to either perverse and arbitrary.

  • Stay petition - commanding the petitioner to pay 20% of the demanded amount - CIT(A) cannot blindly apply the Circular, as in the instant case. - Even the order do not reflect whether opportunity of hearing was given to the petitioner nor any advertance to any arguments.

  • Customs

  • Rejection of Refund Claim - denial of refund on the ground that the assessment of Bill of Entry has not been challenged by the appellant by filing appeal before appropriate forum - Whenever an assessee pays duty under protest, it indicates a challenge by him on the demand of duty made by the department. Therefore it is for the department to pass appropriate assessment order considering the protest made by the assessee.

  • IBC

  • Liquidation of the Corporate Debtor - Waterfall Mechanism of section 53 - seeking to remove goods lying in Customs Bonded Warehouse without any condition, demur and/or payment of Customs Duty - section 238A read with section 53 of the Insolvency and Bankruptcy Code, 2016 - Permission granted.

  • Service Tax

  • Principles of Natural Justice - Whether the Tribunal should permit the appellant to adduce documents/evidence in support of its plea that the activity carried out by the appellant would fall under the category of ‘works contract’, which was not leviable to service tax before 01 June, 2007? - Permission granted.

  • Demand of Service Tax - Franchise Service - In this case both the franchisee taking over the liability of debt of the franchisor and paying an amount by way of shares has been quantified in terms of money and that is how the SCN has computed the demand. There is no doubt that the entire amount has been paid only for consideration of this service. There is no other arrangement in this case. Therefore, the case is against the appellant on merits.


Articles


Notifications


Circulars / Instructions / Orders


News


Case Laws:

  • GST

  • 2020 (7) TMI 381
  • 2020 (7) TMI 380
  • 2020 (7) TMI 379
  • 2020 (7) TMI 378
  • 2020 (7) TMI 377
  • 2020 (7) TMI 376
  • 2020 (7) TMI 375
  • Income Tax

  • 2020 (7) TMI 374
  • 2020 (7) TMI 373
  • 2020 (7) TMI 372
  • 2020 (7) TMI 371
  • 2020 (7) TMI 370
  • 2020 (7) TMI 369
  • 2020 (7) TMI 368
  • 2020 (7) TMI 367
  • 2020 (7) TMI 366
  • 2020 (7) TMI 365
  • 2020 (7) TMI 364
  • Customs

  • 2020 (7) TMI 363
  • 2020 (7) TMI 362
  • Insolvency & Bankruptcy

  • 2020 (7) TMI 361
  • 2020 (7) TMI 360
  • 2020 (7) TMI 359
  • 2020 (7) TMI 358
  • Service Tax

  • 2020 (7) TMI 357
  • 2020 (7) TMI 356
  • Central Excise

  • 2020 (7) TMI 355
  • Indian Laws

  • 2020 (7) TMI 354
 

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