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TMI Blog2023 (10) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... her due to Covid-19 pandemic, the company was operating on a limited staff - there are sufficient cause to condone the delay of 30 days in filing the appeal after expiry of appeal period on 23.09.2021. Even otherwise, as per Order dated 10.01.2022 of Hon ble Supreme Court in Mise. Application No. 21 of 2022 in Misc. Application No. 665 of 2021 in Suo Moto Writ Petition (C) No.3 of 2020 [ 2022 (1) TMI 385 - SC ORDER] , the period from 15.03.2020 till 28.02.2022 shall stand excluded in computing the period of limitation and all persons shall have a limitation period of 90 days from 01.03.2022. In view of the foregoing, the delay is condoned in filing the appeal in terms of section 100 of the CGST Act, 2017 and proceed to decide the appeal on merits. The legislature has clarified its intent to disallow input tax credit on goods or services or both which are to be used for activities relating to obligations under corporate social responsibility. Appeal dismissed. - SAMIR VAKIL AND B.V. SIVA NAGA KUMARI, MEMBER Present for the Appellant : Shri Gorky Tiwari At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CGST Act: SI.No. Category of inputs/input services. Expense Items (illustrative) 1 Books and stationery Providing Notebooks/ course materials for schools. 2 All kinds of civil works, whether or not including plant and machinery items Construction of cement bench at public places, public urinals, auditoriums etc. at educational institutions. 3 All plant and machinery items Procurement and installation of oxygen generating plant at hospitals, water filler plants. solar water heaters. 4 Medical equipment and accessories Masks. Sanitisers. Oxygen concentrator. 5 furniture Chairs and tables in schools and hospitals. 7. The Gujarat Authority for Advance Ruling (hereinafter referred to as GAAR ) vide its order No. GUJ/GAAR/R/44/2021 dated 11.08.2021, gave the following ruling to the aforementioned questions:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices as per section 16 of the CGST Act is to ensure that the same is being used in the course and furtherance of business . (d) GAAR has erroneously treated the expression normal course of business and course and furtherance of business on the same fooling and has denied the benefit of ITC. As per the CSR Rules. CSR activities will not include such activities that are undertaken by the Company in it s normal or ordinary course of business. However, it doesn t mean that the CSR activities are not in the course of furtherance of business . In other words, neither the CSR Rules nor the Companies Act state that CSR activities are not in the course and furtherance of business. (c) the CSR activities as per the Companies Act does not include such activities which a company undertakes as part of its usual or routine business. However, on the contrary, CSR activities undertaken by a company are absolutely in the course and furtherance of business which is a broader term and includes any activity undertaken by a company which directly or indirectly impacts its business. (f) The CSR activities as per the Companies Act read with CSR Rules do not include such activitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are statutory requirement and it is in furtherance of business; that GST department has agreed to their submissions. The appellant further also furnished additional written submissions vide letter dated 24.01.2023 wherein it was submitted that pursuant to section 2(17)(b) of the CGST Act, an activity or a transaction which is done in connection with the main business operations of the company shall be covered under the definition of business under the GST law; that in their case, pursuant to section 135(7) of the Companies Act, 2013, a company may incur a penalty of twice the unspent amount required to be transferred to any fund included in Schedule VII of the Act or the unspent CSR Account, or one crore rupees, whichever is less and every officer in default must pay a penalty of 1/10 the of the unspent amount required to be transferred to any fund included in Schedule VII of the Act or unspent CSR Account, or two lakhs rupees, whichever is less; that it is clear that a company has no other way except to spend such CSR amount or transfer such amount to funds specified by Govt. Non-spending of CSR funds will definitely have an impact on the functioning of company as penal provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foregoing, we condone the delay in filing the appeal in terms of section 100 of the CGST Act, 2017 and proceed to decide the appeal on merits. 13. We have gone through the facts of the case as submitted in the Appeal papers, the Ruling of the GAAR, documents on record and oral as well as all the written submissions made by the appellant. 14. We find that the appellant has sought ruling on the questions as enumerated in para 6 above. The ruling sought on point (b) is to be considered only if the ruling to point (a) is in affirmative. Firstly, the provision related to CSR is mandated under the Companies Act, 2013. As per Section 135 of the said Act,- Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Hoard consisting of three or more directors, out of which at least one director shall be an independent director. Further Rule 2(d) of the Companies (CSR Policy) Rules, 2014, made by the Central Government in exercise of its powers under section 469 of the Companies: A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be prudent to reproduce the relevant provision for availing of ITC, viz,- Section 16(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. Section 17 : Apportionment of credit and blocked credits (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the wordings of the Hon ble High Court of Delhi in the case of Manufacturers Traders Association [2020 (43) GSTL 616 (Del)], wherein it was held as follows:- 10........The Respondent No. 3 is a Constitutional body chaired by the Union Minister for Finance and all other members are the Union Minister of State for Finance, and Ministers for Revenue or Finance of all the Slates. The 101st Amendment to the (Constitution had brought into existence the GST framework and created. Respondent No. 3 as the highest deliberative forum to resolve the issues arising out of the implementation of the GST The rate of taxes is jointly decided by the Centre and States on the recommendations of the Council. The Council has the power and prerogative to issue recommendations on issues in terms of Article 279A(4) of the Constitution. The composition of Respondent No. 3 and the constitutional scheme of taxation is a clear indication that the functioning of the GST Council is based on collaborative efforts that embody the spirit of cooperative federalism. The coming together of the stakeholders has given rise Io a unified system of taxation for the entire country. The GST tax rates must be notifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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