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TMI Blog2024 (10) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... a failure on the part of the writ petitioner to discharge perceived GST liabilities considering commission income @ 0.75% of the corporate guarantee which may have been extended. Attention drawn to RBI Circular No. RBI/2021-22/121 dated 09 November 2021 in terms of which the Central Bank itself restrains parties from obtaining consideration by way of commission in respect of guarantees of the genre with which are concerned. While the respondents may continue with the proceedings forming part of the impugned SCN dated 02 August 2024, they shall desist from ruling on the issues pertaining to discounts and Section 15 (3) (b) as well as guarantee commission - Let the writ petition be called again on 09.01.2025. - HON'BLE MR. JUSTICE YASHW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices Tax Act, 2017 [CGST Act] which are impacted by the impugned Circular. 4. We note that the SCN proceedings themselves pertain to the period of 2017-18 to 2022-23. Insofar as Section 15 (3) (b) of the CGST Act is concerned, the impugned Circular makes the following provisions: 2.1 Section 15 of the CGST Act provides for value of taxable supply of goods or services or both. Sub-section (3) of the said section provides that the value of supply shall not include discount given by the supplier, subject to certain conditions. As per clause (b) of the said sub-section, any discount which is given after the supply has been effected shall not be included in the value of the supply, only if it satisfies the following conditions: i. Such discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the recipient has made the required proportionate reversal of input tax credit at his end in respect of such credit note issued by the supplier. xx xx xx 2.7 In cases, where the amount of tax (CGST+SGST+IGST and including compensation cess, if any) involved in the discount given by the supplier to a recipient through tax credit notes in a Financial Year is not exceeding Rs 5,00,000 (rupees five lakhs only), then instead of CA/CMA certificate, the said supplier may procure an undertaking/ certificate from the said recipient that the said input tax credit attributable to such discount has been reversed by him, along with the details mentioned in Para 2.5 above. 2.8 Such certificates issued by the CA/CMA or the undertakings/ certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid would clearly be an impossibility and in any case should not affect transactions undertaken prior to 26 June 2024. 7. Insofar as the aspect of guarantee commission is concerned, we take note of the allegations which stand levelled in the impugned SCN and where the respondents view a failure on the part of the writ petitioner to discharge perceived GST liabilities considering commission income @ 0.75% of the corporate guarantee which may have been extended. 8. Our attention, however, has been drawn to RBI Circular No. RBI/2021-22/121 dated 09 November 2021 in terms of which the Central Bank itself restrains parties from obtaining consideration by way of commission in respect of guarantees of the genre with which we are concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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