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2019 (7) TMI 943 - HC - GSTConstitution of the Authority for Advance Ruling - Constitutional validity of Section 96(2) of the Rajasthan Goods and Service Tax Act, 2017 and Section 96 of the Central Goods and Services Tax Act, 2017 - Levy of IGST on transportation services - import of goods on FOB basis - reverse charge mechanism - vires of notification dated 28.6.2017 - It is submitted that, the impugned notification has been illegally shifted the liability to pay IGST on the importer who is not the recipient of the services in case of import on CIF basis. Held that - Issue notice, returnable by 10th July, 2019.
Issues:
Challenge to the constitutional validity of Section 96(2) of the Rajasthan Goods and Service Tax Act, 2017 and Section 96 of the Central Goods and Services Tax Act, 2017 regarding the constitution of the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR). Double taxation on transportation services due to the levy of IGST twice. Legality of the notification declaring the importer as the recipient of service for the levy of IGST on reverse charge mechanism in case of import on CIF basis. Constitutional Validity of AAR and AAAR: The petitioner contested the constitution of the AAR and AAAR, arguing that these bodies should include members from a judicial background to discharge judicial functions effectively. The petitioner relied on a Supreme Court judgment emphasizing the importance of judicial representation in such authorities. The contention was that the current composition, consisting only of tax officers, is arbitrary and unconstitutional. Double Taxation on Transportation Services: The petitioner highlighted the issue of double taxation on transportation services due to the levy of IGST twice, which was deemed as unjust. The petitioner argued that the levy of IGST twice on transportation services, under the impugned notification, amounts to double taxation, which is unfair and needs to be rectified. Legality of Notification on Importer as Recipient of Service: The challenge was made to a notification declaring the importer as the recipient of service for the levy of IGST on reverse charge mechanism in case of import on CIF basis. The petitioner contended that this notification is ultra vires to Section 5(3) of the IGST Act, as it exceeds the power conferred by the Act. The petitioner argued that in the case of import on CIF basis, the exporter should be considered the recipient of service, not the importer as stated in the impugned notification. Judicial Precedent and Support: The petitioner cited orders passed by the Gujarat High Court in similar matters, providing additional legal support to the arguments presented. The reference to these orders strengthens the petitioner's case by showcasing consistency in legal interpretation. Court Order: The High Court issued notice to the respondents, making the matter returnable by a specified date. The petitioner was directed to serve copies of the petition to relevant parties, and no coercive steps were to be taken against the petitioner in the meantime. This order ensures due process and fair treatment during the legal proceedings.
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