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2017 (9) TMI 1301 - HC - GSTRate of GST on old and scrap buses - Validity of Tender notice for Auction - classification of old and scrap Buses - Whether buses would attract GST @ 28% as normal buses or at the rate of 18% under Schedule-III Heading No.7204 Ferrous waste and scrap; remelting scrap ingots of iron or steel or under Residuary Entry No.453 of the same Schedule-III, in which, Goods which are not specified in Schedule I, II, IV, V or VI of the KGST Act? - Held that - at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage. First of all, the GST rates as indicated in the said E-Tender Notice Annexure-A does not give the fixed rate of GST at 28% as submitted by the petitioners. It only stipulates the rate of GST As applicable /28.0 . Whether the correct rate is 18% GST as claimed by the petitioners under the aforesaid entries of Schedule-III or 28% or not can be clarified either by the Respondents-KSRTC or the Respondent-Commercial Tax Department. It is for the petitioners to participate in the said Tender process as per the terms indicated therein or not to so participate. The E-Tender Notice cannot be quashed by this Court, as this Court does not find illegality in the same. Petition dismissed - decided against petitioner.
Issues:
1. Challenge to E-auction Notification 2. Determination of GST rate on scrap buses 3. Prematurity of the petition Challenge to E-auction Notification: The petitioners, auction purchasers of scrap buses, sought a writ to quash E-auction Notifications issued by the 1st Respondent. They argued that the GST rate of 28% mentioned in the notice was incorrect for scrap buses. The petitioners contended that scrap buses, certified as unfit for road use, should attract 18% GST under specific headings of the GST Act. They highlighted the absence of an Advance Ruling Authority for tax disputes under the new GST Acts. Comparisons were drawn with E-Tender Notices from other states reflecting an 18% GST rate for scrap buses. Determination of GST rate on scrap buses: The Respondent's counsel clarified that the E-Tender Notice did not fix the GST rate at 28% but stated it as "As applicable/28.0". The Respondents suggested seeking clarification from the KSRTC or the Authority for Advance Ruling under the GST Acts. The Court found the petitions premature, emphasizing that the GST rate was not definitively set at 28% in the Notice. It advised the petitioners to participate in the tender process and resolve GST rate queries through appropriate channels. Prematurity of the petition: The Court deemed the petitions premature as the GST rate dispute was yet to be clarified by the Respondents or the Commercial Tax Department. It emphasized that the petitioners should engage in the bidding process based on the rates specified in the E-Tender Notice. The Court highlighted the availability of mechanisms for determining tax liability during regular assessment proceedings or through Advance Ruling Authorities. Dismissing the petitions, the Court emphasized the need for petitioners to address concerns regarding the constitution and functioning of Advance Ruling Authorities with the government. In conclusion, the Court dismissed the petitions as premature, advising the petitioners to engage in the bidding process and resolve GST rate queries through appropriate channels rather than invoking writ jurisdiction at that stage.
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