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TMI Blog2019 (4) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... nding provision of SGST Act can be initiated if such tax is not paid for a period from 01-07-2017 to 12-10-2017 within the respective due dates? 3. Whether interest on the delayed payment of CGST / SGST under section 9 (4) of the Act is applicable, when such tax on the relevant transaction/s has been kept on hold till 30-09-2019 by virtue of Notification No. 22/2018 - Central Tax (Rate) dated 06-08-2018? 4. Whether the circular dated 2nd May 2018 (citd supra) will have any effect of taxation including interest on the transaction dated 31st August 2017 At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra of the notification No. 8/2017 dated 28-06-2017 without having any saving clause specifying its effective date. In other words, this amendment is for the omission of the proviso in the aforesaid Notification dated 28-06-2017 and its effective date is to be considered ab initio from the mother notification dated 28-06-2017 effective from 01-07-2017(supra). 2. Had the intention of the legislation is to give the effect of such omission of the "Proviso" from the date of notification of 13-10-2017, then such a clause of date of effect of applicability would have been specifically provided therein. Moreover, in absence of any such specific clause mentioning effective date, support of General Clauses Act, 1897 is to be taken. Accordingly, section 6 of the said Act is applicable in case of repeals and not omission. Hence, unless a date is specified in the amendment notification, an omission of any clause is considered to be made effective from the date of issue of mother notification. (i.e. No. 8/2017 CT (Rate) dated 28.06.2017 effective from 01-07-2017) 3. The interpretation as stated in Paras (1) and (2) above, is based on the decisions by the Supreme Court in various cases. The Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Maharashtra. A copy of the said agreement is enclosed herewith and marked as Annexure-A. 4. The Tax Research Unit, Department of Revenue, Govt of India, New Delhi issued a circular No. 44/18/2018-CGST- F No.341/28/2017-TRU dated 02.05.2018, on the taxability of the transfer of "Tenancy Rights" (also commonly called "Pagdi") under the provisions of GST. Relevant para 4 of the said circular states as under: Merely because a transaction or a supply involves, execution of documents which may require registration and payment of registration fee and stamp duty, would not preclude them from the scope of supply of goods and services and from payment of GST. The transfer of tenancy rights cannot be treated as sale of land or building declared as neither a supply of goods nor of services in para 5 of Schedule III to CGST Act 2017. Thus a consideration for the said activity shall attract levy of GST. 5. The instant transaction relating to transfer of tenancy rights is from an unregistered person and the consideration paid by the applicant is liable to GST under section 9 (4) of the CGST Act under the reverse charge mechanism (RCM). For ready reference, the said sub-section is reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e GST Council of 6.10.2017 as published in the Press Release at Point No.6, which states that "RCM shall be suspended till 3 1.03.2018". It is reproduced as below: 6. The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act 2017 shall be suspended till 31.03.2018 and will be reviewed by a committee of experts. This will benefit small businesses and substantially reduce compliance costs [Emphasis underlined! It would be seen from the aforesaid minute the GST Council meeting that there is no reference of effective date of the suspension of the provisions of section 9(4) of the CGST Act / 5 (4) of the IGST Act. On the strength of the Council's decision the Notification dated 13.10.2017 is issued omitting the proviso from the mother Notification [No.8/2017-CT (Rate) of 28.06.2017), which is effective from 01.07.2017. 10. The applicant further submits that the aforesaid amendment "omitting" the proviso is not a retrospective in nature but is in accordance with the intention of the legislation that the tax on RCM basis under section 9(4) of the Act is to be suspended till 31st March, 2018. (Note: i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rely on the following case law relating to deletion / omission: i. Rayala Corporation (P) Ltd. & Ors vs. Director of Enforcement, New Delhi - (1970 AIR 494 = 1970 SCR (1) 639) = 1969 (7) TMI 109 - SUPREME COURT OF INDIA - The Court made it clear that the word "omission" is different than the word "repeal" and the provisions Section 6 of the General Clauses Act which are applicable to repeal are not at all applicable to word omission in absence of an appropriate saving clause. The Court's observations reproduced as below: "In the case before us, s.6 of the General Clauses Act cannot obviously apply on omission of R.132A of the D.I.R.s for the two obvious reasons that s.6 only applies to repeals and not omission, and applies when the repeal is of a Central Act or Regulation and not of a Rule" (Refer para 3-page16) ii. Kolhapur Canesugar Woks Ltd....vs Union of India - (2000 (1) SCR 518) = 2000 (2) TMI 823 - SUPREME COURT OF INDIA, - The Supreme Court has held that section 6 of the General Clauses Act was not applicable in case of omission of an enactment and it was applicable only in case of repeal of an amendment. The finding of the court reproduced below: The position is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CGST Act / SGST Act for receipt of supply of goods and / or services by us from an unregistered person is applicable irrespective of any threshold limit right from 01-07-2017 vide Notification No.8/'2017 dated 28.06.2017 read with Notification 38/2017 dated 13-10-2017? 2. Whether any action for recovery of tax under section 9(4) of CGST Act or corresponding provision of SGST Act can be initiated if such tax is not paid for a period from 01-07-2017 to 12 10-2017 within the respective due dates? 3. Whether interest on the delayed payment of CGST / SGST under section 9 (4) of the Act is applicable, when such tax on the relevant transaction/s has been kept on hold till 30-09-2019 by virtue of Notification No. 22/2018 - Central Tax (Rate) dated 06-08 2018? 4. Whether the circular dated 2nd May 2018 (citd supra) will have any effect of taxation including interest on the transaction dated 2nd September 2018? 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- It is submitted that, Issue on which advance ruling is required: I the Jurisdictional Officer MUM- VAT-C-862 of Nodal Div. 3 after examined the said application wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f taxation including interest on the transaction dated 31st August 2017. Contention :- Yes, transaction date 31.05.2017 for Rs. 54,00,000/- is taxable under GST Law as per circular dated 2nd May 2018. Para -5 is reproduced as under. To sum up, the activity of transfer of "tenancy rights" is squarely covered under the scope of supply and taxable per-se. Transfer of tenancy rights to new tenant against consideration in the form of tenancy premium is taxable. However, renting of residential dwelling for use as a residence is exempted (51. No. 12 of notification No. 12/2017- Central Tax (Rate). Hence, grant of tenancy rights is a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is exempted. As regards services provided by outgoing tenant by way of surrendering the tenancy rights against consideration in the form of a portion of tenancy premium is liable to GST. The said circular is related with tax liability of tenancy right UNDER GST 04. HEARING The Preliminary hearing in the matter was held on 18.09.2018, Sh. Narendra Ambatkar, Advocate along with Ms. Prajkta Dhuri, Practioner, appeared and requested for admission of applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate value of such supplies of goods or service or both received by a registered person from any or all the suppliers provided that the supplies are within the limit of Rs. 5000 per day. The contention of the applicant is already reproduced herein above. In short applicant submits that the omission of the above said exemption, mentioned in the original notification, has been deleted by the amending Notification No. 38/2017 dated 13.10.2017 and is therefore effective from the date of original notification dated 28.06.2017 i.e. RCM provisions are inapplicable for the period from 01.07.2017 to 12.10.2017. To arrive at this conclusion applicant submits that nothing is mentioned in the notification to say that the effect Of omission of the proviso is from the date of notification. We shall now reproduce the relevant provisions Section 9 (4), notification No.8/2017 of the GST Act and Notification No. 38/2017 of the GST Act. Section 9(4) -The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed." Further Supreme Court in Hitendra Vishnu Thakur and Others v. State of Maharashtra and Others, [1994] 4 SCC 602 = 1994 (7) TMI 343 - SUPREME COURT OF INDIA has culled out the principles with regard to the ambit and scope of an amending Act and its retrospective operation as follows : (i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits. (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature. (iii) Every litigant has a vested right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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