2023 (3) TMI 1263 - HC - GST

Levy of IGST - service aspect of the transaction - composite supply - supply of services by the shipping line - HELD THAT - The issue involved in this intra-Court appeal in view of the decision of the Hon ble Supreme Court in the case of Union of India Ors. vs. Mohit Minerals Pvt. Ltd. 2022 (5) TMI 968 - SUPREME COURT , where it was held that The impugned levy imposed on the service aspect of the transaction is in violation of the principles of composite supply enshrined under Section 2(3) read with Section 8 of the CGST Act. Since the Indian importer is liable to pay IGST on the composite supply , comprising of supply of goods and supply of services of transportation, insurance etc. in a CIF contract, a separate levy on the Indian importer for the supply of services by the shipping line would be in violation of Section 8 of the CGST Act. In the case on hand, the observation of the Hon ble Supreme Court in sub-paragraph (v) of paragraph 148(i)(b) would be applicable. Appeal allowed.

Summary

Issues Involved:
Challenge against the order imposing tax on a transaction by the Commissioner, Service Tax.

Summary:
The High Court of Calcutta heard an intra-Court appeal challenging the order imposing tax on a transaction by the Commissioner, Service Tax. The Court referred to a decision of the Hon'ble Supreme Court in the case of Union of India & Ors. vs. Mohit Minerals Pvt. Ltd. The Supreme Court held that the recommendations of the GST Council are not binding on the Union and States, as they are recommendatory in nature. The Court noted that the imposition of tax on the 'service' aspect of the transaction was in violation of the principles of composite supply under the CGST Act. Consequently, the High Court allowed the appeal and quashed the order passed by the Commissioner of Service Tax, Kolkata. The connected application for stay was also disposed of in light of this decision.