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2024 (2) TMI 1066 - HC - GSTRefund of IGST - Constitutional Validity of section 96(2) of the RGST Act and section 96 of the CGST Act, section 99 of the CGST Act and Section 99 of the RGST Act , Entry 10 of the Impugned Notification dated 28.06.2017, proviso to section 5(1) of the IGST Act, 2017 - HELD THAT - In the case of Mohit Minerals 2022 (5) TMI 968 - SUPREME COURT , Hon ble Supreme Court, inter alia observed and directed 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. The writ petition filed by the petitioner is disposed of in the light of the judgment in the case Mohit Minerals - the petitioner would be entitled to refund of the IGST paid by it - petition disposed off.
Issues involved:
The issues involved in the judgment include challenging the constitution of the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) under the RGST Act and CGST Act, the notification regarding the levy of IGST on reverse charge mechanism, and the proviso to section 5(1) of the IGST Act resulting in double taxation. Constitution of AAR and AAAR: The petitioner sought to declare the provisions of section 96(2) of the RGST Act and section 96 of the CGST Act, along with related rules, as arbitrary and unconstitutional. Similarly, the provisions of section 99 of the CGST Act and RGST Act regarding the constitution of the AAAR were challenged. The petitioner's plea was based on the judgment in Union of India Vs. Mohit Minerals (Pvt.) Limited, where it was indicated that the reliefs claimed by the petitioner would be available. The submissions made were not disputed by the respondents, leading to the disposal of the writ petition in line with the Mohit Minerals case. Levy of IGST on Reverse Charge Mechanism: The petitioner challenged Entry 10 of the Impugned Notification, which notified the 'importer' as the 'recipient' of service for the levy of IGST on reverse charge mechanism. The petitioner argued that this was ultravires to section 5(3) of the IGST Act, 2017. The judgment in the Mohit Minerals case highlighted that a tax on the supply of a service, already included as a tax on the composite supply of goods, cannot be allowed. Consequently, the petitioner was entitled to a refund of the IGST paid, and the respondents were directed to do the needful within six weeks. Proviso to Section 5(1) of the IGST Act: The petitioner also challenged the proviso to section 5(1) of the IGST Act, which provided for the levy and collection of IGST on goods imported into India without excluding the value of Transportation Services, leading to double taxation. The judgment in the Mohit Minerals case emphasized that the impugned levy on the 'service' aspect of the transaction was in violation of the principle of 'composite supply' enshrined under the CGST Act. As a result, the petitioner was granted relief and entitled to a refund of the IGST paid. This summary outlines the key issues raised in the judgment before the Rajasthan High Court, the arguments presented by the petitioner, and the court's decision based on the principles highlighted in the Mohit Minerals case.
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