October 2020 ERNAKULAM BRANCH

NEWSLETTER

ERNAKULAM BRANCH OF SOUTHERN INDIA REGIOANL COUNCIL (SIRC) OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI)

October 2020

Issue No: 114Vol: VIII

CONTENTS

2

853

Chairman’s Message

Judicial Decisions on Direct TaxesJudicial Decisions on Indirect TaxesBranch Activity

CA. Nihar Niranjan Jambusaria, Hon’ble Vice President of ICAI inaugurating the 5 Days virtual refresher course on Company Law

October 2020 NEWSLETTER

2 Ernakulam Branch of SIRC of ICAIErnakulam Branch of SIRC of ICAI

Chairman’sMessageChairman’sMessage

Dear Professional Colleagues,

Recently, one of our fellow colleagues asked me a question. Are you disappointed being the Chairman in this covid-19 period?. This is a question, which some of you may have also faced or may have heard someone asking. My answer to this question was an emphatic ‘No’. In fact, covid-19 pandemic derailed all our action plans for the year and made our year un-certain. However, it thrown open many a challenging opportunities and new ways of doing things, which hitherto we were unwilling to try and experience. Looking back, across the six months of our activities, we can proudly say that we have surpassed all the challenges put forward by the pandemic, exploring new ways and assimilating new norms. We can run away from problems; it is super easy. Facing prob-lems and working through them, makes us strong and successful.

The highlight of September month was 5 Days Re-fresher Course on Company Law. Probably for the first time a 5 Days Refresher Course on Company Law was organized by Corporate Law and Corpo-rate Governance Committee of ICAI and hosted by our branch. Our Vice President CA Nihar Niranjan Jumbusariya was the Chief Guest and inaugurated the Refresher Course. Eminent faculties made the programme meaningful and was well attended and appreciated by the participant members. Heart felt thanks to the Chairman of the committee CA Chan-drashekar V Chitale, Vice Chairaman CA Durgesh Kabra, our CCM CA Babu Abraham Kallivayalil and RCM CA Jomon K George for all the help and sup-port in organizing and conducting the virtual refresher

course. The details of the programme along with other cpe programme conducted during the month is reported separately elsewhere in this newsletter.

On 5th September, we celebrated Teachers Day virtually in which senior member and founder sec-retary of the branch CA Venugopal C Govind was the Chief Guest. CCM CA Babu Arbaham Kallivay-ali and RCM CA Jomon K George were also pres-ent on the occasion. On 10th September we had a public programme jointly with Kerala Chamber of Commerce and Industry on ‘Schemes for Business Revival’. The meeting was organized to pass on valuable information to public as well as members on the recent Government Policy initiative on MSME Restructuring and Credit facilities for MSME Sector badly affected by covid pandemic. Eminent facul-ties spoke on the session and the programme was well attended by public and members. More details of the these programme are given elsewhere in this newsletter. In short, as usual, it was again a busy month, with cpe programme, public pawareness rogramme, students programme, study class and online coaching classes and other activities.

I am closing my remarks with a beautiful sentence I read recently. “Never Give Up. There is no such thing as ending. Just a new beginning”. Stay Safe And Healthy.

With warm regards and love

CA Roy VargheseChairman, ICAI Ernakulam Branch.

October 2020NEWSLETTER

3Ernakulam Branch of SIRC of ICAI

BRANCH ACTIVITIES September 2020

Virtual CPE Meeting

The branch has organized 4 Virtual CPE Meetings in the month of September, 2020. Meeting on “Discussion on de-cided case laws on Goods and Services Tax” was organised on 4th September, 2020. CA. Keshav Gargh, Chandigarh was the speaker. On 8th September, 2020 a meeting on “Insights on Tax audit – A Clause by Clause Analysis of Form 3CD and Issues in Tax Audit” was organised in which CA. Vedant Parikh, Ahmedabad and CA. Nimisha Jain were the speakers. Meeting on the topic “ GST Audit – A clause by clause analysis of GSTR 9 & 9C” was organised on 11th September, 2020 . CA. S.S. Gupta, Mumbai was the speaker. Another meeting was organized on 18th September, 2020 on “Digital India and Digital Compliances” and the speaker was CA. Dayaniwas Sharma, Vice Chairman, Digital Accounting and Assurance Board of ICAI.

5 days Virtual Refresher Course on Company Law was organized by the branch from 23rd to 25th September and from 30th September to 1st October, 2020. CA. Nihar Niranjan Jambusaria, Hon’ble Vice President of ICAI inaugurated the virtual refresher course. The topics covered were “Financial Statements under Schedule III of Companies Act 2013 and Notes to Accounts”, “Board report under Companies Act 2013 & Privileges and Exemptions of Private Companies under Companies Act 2013”, “Loan to Directors under Sec 185, loans and investments under Sec 186 and related party trans-actions under Sec 188 under Companies Act 2013, “ Auditor’s report and Compliances under Standards on Audit” and “ Commonly noted non-disclosures under Accounting Standards and non-compliance in financial statement”.

CA. Chandrashekar Vasant Chitale, Chairman, Corporate Law and Corporate Governance Committee of ICAI, CA. Chinnsamy Ganesan, Chennai, CA. Punarvas Jayakumar, Bengaluru, CA. Durgesh Kumar Kabra, Vice Chairman, Corporate Law and Corporate Governance Committee of ICAI and CA. Jomon K George, Past Chairman and Member, SIRC of ICAI were the resource persons.

CA. Keshav Gargh CA. Nimisha Jain CA. Vedant ParikhCA. S.S. Gupta

CA. Chandrashekar Vasant Chitale,Chairman, Corporate Law and

Corporate Governance Committee of ICAI

CA. Durgesh Kumar Kabra, Vice Chairman, Corporate Law and Corporate Governance Committee

of ICAI

CA. Chinnsamy Ganesan CA. Punarvas JayakumarCA. Jomon K George, Past Chairman and Member,

SIRC of ICAI

CA. Dayaniwas Sharma, Vice Chairman, Digital Accounting and Assurance Board of ICAI

A Study circle meeting was conducted on 10th September, 2020. The topic on “Holding of AGM and Annual Filing under Companies Act 2013” were handled by CA. Shawn Jeff Christopher.

OTHER ACTIVITIES

1.Teacher’s Day CelebrationsTeacher’s Day Celebration was organized on 5th September, 2020 through virtual mode. CA. Venugopal C Govind, Senior member and Founder Secretary of the branch was the Chief Guest on the occasion. He spoke on the topic “Teacher – Our mentor and Guide”. CA. Babu Abraham Kallivayalil, Central Council Member of ICAI and CA. Jomon K George, Past Chairman and Member, SIRC of ICAI felicitated. Mr. Jose Mundancherry gave the reply speech on the

5 days Virtual Refresher Course on Company Law



occasion representing the faculty members of the branch. Ms. Sruthy Sankar, Intermediate Student, Ms. Phoebea Reena George, SICASA Secretary and Ms. Denitta Men-dez, Final Student spoke on the occasion representing students. 165 participants of students and faculty mem-bers attended the celebration.

FORTHCOMING PROGRAMMES IN THE MONTH OF OCTOBER, 2020Date and Time Topic Speaker

07-10-2020 to 09-10-2020 (1.30 pm to 3.30 pm)

Virtual Refresher Course on Digital Technologies (ABCD of Technology)

CA. Manu Agrawal, Chairman DAAB of ICAI CA. Dayaniwas Sharma, Vice Chairman, DAAB – ICAICA. Anand P Jangid, BengaluruShri Niraj Agarwal, Cyber Security ExpertCA. M.S. Mehta, Saharanpur

12-10-2020 11 am to 1 pm

Virtual CPE Meeting on “New Labour Codes with special emphasis on ESI, PF, Bonus, Gratuity and shops and Commercial Establishments Act”

Adv. C. B. Mukundan, Thrissur

16-10-20203 pm to 6 pm

Virtual CPE Meeting on “Implications of FCRA 2020 to NGO’s and related aspects”

CA. Dr. M. Kandasami, Chennai

2.Public Programme jointly with Kerala Chamber of Commerce and Industry

We have organized a public programme on “Schemes for Business Revival” jointly with Kerala Chamber of Com-merce and Industry (KCCI) on 10th September, 2020 through virtual mode. CA. Roy Varghese, Chairman wel-comed the gathering. Mr. G. S. Prakash, Deputy Director, MSME Development Institute, Thrissur spoke on the topic: Credit and recent policy initiatives of Government of India for MSME Sector. Mr. M.V. Ravindran, AGM, Canara Bank Circle Office, Trivandrum representing SLBC Kerala spoke on the topic: Emergency credit & restructuring procedures. Mr. Rajesh Nair, Convenor, KCCI Youth Forum proposed vote of thanks. CA. Renjith R Warrier, Vice Chairman and CA. Jose.K. V, Secretary also spoke on the occasion.

3. Inspection of Examination centre at various schools at Ernakulam and Aluva

We have identified 5 new examination centres - Govern-ment Girls Higher Secondary School, Ernakulam and Alu-va, ACS School, Kaloor, Chinmaya Vidyalaya, Vaduthala, St. Francis High School for Girls Aluva for holding Char-tered Accountants Examinations from 1st to 18th Novem-ber, 2020. The proposed examination centres were in-spected in the month of September, 2020. The inspection report was submitted to Examination department for their approval.

STUDENTS ACTIVITIES

1.Webinar for students: (a) WEBINAR ON TAX AUDIT: Ernakulam Branch of SICASA of ICAI conducted Webinar on Tax Audit on 25th September 2020. The Speaker of the Seminar was CA. Shyam Mahadevan, Ernakulam

(b) WEBINAR ON GSTR 9 & 9C:Ernakulam Branch of SICASA of ICAI conducted Webinar on GSTR 9 & 9C on 27th September 2020. CA. Ravinath R Pai, Ernakulam was the Speaker.

Online classes were arranged for students due to the out-break of Coronavirus – Covid – 19 : In view of the outbreak of Coronavirus – Covid – 19 throughout the country, we have arranged online classes for the students of Interme-diate (Foundation Route), Intermediate Direct Entry stu-dents and Foundation for November, 2020 through google meet app.

Mr. G. S. Prakash, Deputy Director,

MSME Development Institute, Thrissur

Hearty congratulations to CA.Joseph Joy Puthussery who was awarded with a Doctoral Degree in Economics from Mahatma Gandhi University. He is the Professor in the Research & Post Graduate Department of Commerce in Bharata Mata College, Thrikkakara

Mr. M.V. Ravindran, AGM, Canara Bank Circle Office,

Trivandrum



Direct Tax

Statute: Income Tax ActSec.4 – Diversion of income by over riding title Decision in favour of : AssesseeTitle : Kumar Rajaram vs ITO Citation: 423 ITR 185 Bench: Madras HC

Testator of the will directing executor to sell the property and out of the sale meet various expenses and payments and pay only balance to the assesse. The expenses and payments made out of sale value stood diverted before they reached the assesse. Hence, the sale consideration in the hands of the assesse would be the actual receipt after meeting such expenses and payments laid out in the will

Statute: Income Tax Act Sec.6(1)(c ) – Visit to India Decision in favour of : AssesseeTitle : Principal CIT vs Binod Kumar SinghCitation: 423 ITR 175 Bench: Bombay HC

Assessee an indian citizen who had migrated with family to a foreign country comes on a visit to India, for determin-ing his residential status under section 6(1)(c ), the num-ber of days stay to be considered is 182 and not 60 days.

Statute: Income Tax ActSec.10(37) – Interest on enhanced compensation Decision in favour of : AssesseeTitle : Lakshmanamma vs ITOCitation: 182 ITD 408 Bench: ITAT Bangalore

Interest received on enhanced compensation under sec-tion 28 of Land Acquisition Act 1894 is eligible for exemp-tion under section 10(37). Interest under section 28 is not

in the nature of interest but is an accretion to the compen-sation and forms part of the compensation .Hence such interest does not fall under section 56(2)(viii) and 145A(b)

Statute: Income Tax ActSec.32, 32(1)(iia) – Trial production Decision in favour of : AssesseeTitle : Tenzing Match Works vs DCITCitation: 423 ITR 312 Bench: Madras HC

Trial production of windmill commenced during the year. Assessee entitled for depreciation on windmill as the same is ready for use. Even though appellant main business was manufacturing of matches, it is entitled to addition-al depreciation on the investment in windmill since it was used for production of electricity

Statute:Income Tax ActSec.40(a)(ii) – Cess is not income tax and is an allowable expenditure Decision in favour of : AssesseeTitle : Sesa Goa Ltd vs JCITCitation: 423 ITR 426 Bench: Bombay HC

In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. The Legislature in section 40(a)(ii) of the Income-tax Act, 1961 , provides that “any rate or tax levied” on “profits and gains of busi-ness or profession” shall not be deducted in computing the income chargeable under the head “profits and gains of business or profession”. There is no reference to any “cess”. In the Indian Income-tax Act, 1922 , section 10(4) had banned allowance of any sum paid on account of “any cess, rate or tax levied on the profits or gains of any busi-ness or profession”. In the corresponding section 40(a)

Reported Judicial Decisions

CA. P.M. Veeramani FCA

In view of the nationwide lockdown, printed copies of the magazines were not available and hence this edition is prepared based on the data available online



(ii) of the Income-tax Act, 1961 the expression “cess” is quite conspicuous by its absence. In fact, legislative his-tory bears out that this expression was in fact to be found in the Income-tax Bill, 1961 which was introduced in Par-liament. However, the Select Committee recommended the omission of expression “cess” and consequently, this expression finds no place in the final text of the provision in section 40(a)(ii) of the Act. The effect of such omission is that the provision in section 40(a)(ii) does not include, “cess” and consequently, “cess” whenever paid in relation to business, is allowable as deductible expenditure. This is also the view of the Central Board of Direct Taxes as re-flected in Circular No. F. No. 91/58/66-ITJ(19), dated May 18, 1967. The Central Board of Direct Taxes Circular, is binding upon the authorities under the Act like the Assess-ing Officer and the appellate authority.

Statute: Income Tax ActSec.45 Bonus Shares not stock in trade Decision in favour of : AsseesseeTitle : Principal CIT vs Ashok Apparels Private LtdCitation: 423 ITR 412 Bench: Bombay HC

There is no presumption that bonus shares issued on shares held as stock in trade should also partake the char-acter of stock in trade. Supreme Court in 73 ITR 652 held that bonus shares should be deemed to be distributed as capital and shareholder receives as capital. Tribunal justi-fied in treating bonus shares as investment

Statute: Income Tax ActSec.54 – Construction not linked to sale Decision in favour of : AssesseeTitle : Principal CIT vs Akshay Sobti Citation: 423 ITR 321 Bench: Delhi HC

Investment in apartment where payments are made to builder based on construction to be treated as construction of house for considering exemption. Payments towards already booked flat was entitled to exemption as there is no condition that the construction of new house should start only after sale of original house

Statute: Income Tax ActSec.55A – Determination of FMV Decision in favour of : AssesseeTitle : Dashrathbhai Patel vs DCITCitation: 182 ITD 327 Bench: ITAT Ahmedabad

Power to make reference under section 142A to the valua-tion officer is restricted to matters covering section 69,69A and 69B, i.e. to determine the understatement in a particu-lar year . It cannot be used for determining fair market val-ue of property as on 1.4.1981. Section 55A(b)(i) concerns a situation where FMV exceeds value of asset claimed by the assesse and cannot be used for lowering of the value as done by the AO for determination of capital gains

Statute: Income Tax ActSec.69A – Purchase of Jewellery Decision in favour of : AssesseeTitle : Ram Prakash Mahawar vs DCITCitation: 182 ITD 55 Bench: ITAT Jaipur

CBDT instruction 1916 allows specific quantity of jewel-lery received by various family members on occasion of marriages and other social and customary occasion which asessee is not required to explain. Where jewellery over and above weight allowed in CBDT circular was explained by proof of documents of acquisition and same was re-corded in the books of accounts, the same has to be con-sidered as explained and no addition could be made under section 69A

Statute: Income Tax ActSec.80IA(4) – Part IX Conversion Decision in favour of : AssesseeTitle : CIT vs Chetak Enterprises Private LtdCitation:423 ITR 267 SC Bench: Supreme Court of India

In order to be eligible for deduction, the assesse should be a company registered in India and carrying on business of development of infrastructure facility. Assessee was origi-nally a firm which was converted to company under Part IX of Companies Act and hence qualified for deduction even though the agreement was initially executed between the erstwhile firm and State Government but was with a clear understanding that as and when firm was converted into a company, the name of the company would be substituted. Action of CIT(A) allowing the deduction and dismissal of revenue appeal by Tribunal and High Court upheld by the Supreme Court

Statute: Income Tax ActSec.80P(2)(a) – Interest on loan to employee Decision in favour of : RevenueTitle : Kerala State Co-operative Agricultural and Rural Development Bank Ltd vs DCITCitation: 423 ITR 350 Bench: Kerala HC

Interest on loan to employees for personal purposes is not entitled to exemption under 80P(2a) as extending of such loans not one of the specified business interest from which is entitled to exemption

Statute: Income Tax ActSec.115BBE – No addition based on e-assessment Decision in favour of : RemandTitle: Salem Sree Ramavilas Chit Co Private Ltd vs DCITCitation: 423 ITR 525 Bench: Madras HC

(i) the order making the assessee liable to tax at the maxi-mum marginal rate of tax by invoking section 115BBE was misplaced. The assessee had prima facie demonstrated that the assessment proceedings had resulted in distort-ed conclusion on the facts that the amount collected by it during the period was huge and remained unexplained and therefore the amount was liable to be treated as unac-counted money in the hands of the assessee under sec-tion 69A . The closing cash on hand during the preceding months of the same year was not much at variance with the closing cash on hand as on October 31, 2016. De-monetization of Rs. 500 and Rs.1,000 notes by the Gov-ernment was on November 8, 2016 and the collection of the assessee between November 1, 2016 and November



8, 2016 was not unusual compared to its collection made during the month of November 2015. The cash deposits made by the assessee in the year 2016 were not at var-iance with the cash deposits made by it in the preceding year. Collection of monthly subscription/dues by the as-sessee during the period in question was reasonable as compared to the same period in the year 2015. (ii) That since the assessment proceedings no longer involved human interaction and were based on records alone, such assessment proceedings could lead to errone-ous assessment if officers were not able to understand the transactions and statement of accounts of the assessee or the nature of the assessee. The assessee was to explain its stand in writing so that the Assessing Officer could ar-rive at an objective conclusion on the facts based on the record. [Matter remanded.]

Statute: Income Tax ActSec.194 H – Commission on re-insurance Decision in favour of : AssesseeTitle:CIT vs Royal Sundaram Alliance Insurance Co LtdCitation: 423 ITR 122 Bench: Madras HC

Tribunal upheld the CIT(A) finding that as a matter of in-dustrial practice the payment was termed “commission on reinsurance premia” but in substance it was discount on reinsurance premium received by an insurance company from another another insurance company and hence TDS was not attracted

Statute: Income Tax ActSec.194 J, 9(1)(vi) – Toll free charges to telecom compa-nies Decision in favour of : RevenueTitle : Vidal Health Insurance TPA (P) Ltd vs JCIT Citation: 182 ITD 30 Bench: ITAT Bangalore

Assessee made payments towards toll free telephone charges for toll free telephone number provide by telecom operators whereby charges for the calls made by custom-ers were borne by the assesse, payment made for such services amounted to royalty and hence was liable for TDS under section 194J. Assessee is assured bandwidth through which assesse was guaranteed transmission of data and voice of customers. This amounts to a ‘process’ involved for exclusive communication link of customers with assesse. The definition of term royalty in explanation 2 to section 9(1)(vi) includes the term ‘process’. Explana-tion 6 clarifies the expression ‘process’.

Statute: Income Tax ActSec.234F – Constitutionally valid Decision in favour of : RevenueTitle : Nirai Mathi Azhagan vs UOICitation: 423 ITR 339 Bench: Madras HC

Section proposing levy of fee for delay in filing of return of income is constitutionally valid and parliament competent to enact such a provision. Provision does not contravene Article 14 of Constitution of India

Statute: Income Tax ActSec.246A, 226 – Payment not mandatory

Decision in favour of : AssesseeTitle : Bhupendra Murji Shah vs DCITCitation: 423 ITR 300 Bench: Mumbai HC

When appeal is pending before CIT(A), AO cannot insist on payment of 20% of demand . Application for stay of collection of taxes during pendency of appeal should be considered and demand can kept in abeyance.

Statute: Income Tax ActSec.263 – Enhancement not possible Decision in favour of : AssesseeTitle : Malanadu Tourist Home vs CITCitation: 423 ITR 262 Bench: Kerala HC

Based on documents collected during survey, AO estimat-ing income which is agreed to by the appellant. CIT cannot exercise revision powers to enhance the estimated income

Statute: Income Tax ActSec.271(1)(c ) – No penalty on various reasons Decision in favour of : AssesseeTitle : ITO vs A.ShihabudeenCitation: 79 ITR Trib 280 Bench: ITAT Cochin

Levy of penalty under section 271(1)(c ) deleted by CIT(A) upheld by the Tribunal on the following grounds : (1) AO had not struck out irrelevant portion in the notice and hence it was not clear whether penalty was for concealment of income or filing of inaccurate particulars (2) Penalty was levied on the addition made due to difference in valuation of cost of construction which is only an estimated addition and the same is not sustainable and (3) Addition was not related to any items mentioned in para 10(d) of Circular 3/2018 dated 11.7.2018 prescribing monetary limits for fil-ing department appeal and hence not maintainable

Statute: Income Tax ActSec.271(1)(c ) – Statutory disallowances Decision in favour of : AssesseeTitle : Frontier Business Systems Private Ltd vs ITOCitation: 79 ITR Trib SN 34 Bench: ITAT Bangalore

Statutory disallowance while completing the assessment – disallowance of expenditure for non deduction of TDS, CSR expense being treated for non-business purposes does not attract penalty as there is no concealment of in-come or filing of inaccurate particulars. The expenditure were otherewise allowable but for the statutory conditions not being complied with

Statute: Income Tax ActSec.271 I, 40(a)(i) – Not furnishing 15CA/15CB Decision in favour of : AssesseeTitle : DCIT vs Integra Software Services Private LtdCitation: 181 ITD 512 Bench: ITAT Chennai

Violation of section 195(6) and failure to file certificates in Form 15CA/15CB are punishable under section 271 I but that cannot be a ground disallowance of payment under section 40(a)(i) , which will be based on whether the said sum was taxable in India or not



RECENT ADVANCE RULINGS UNDER GOODS AND SERVICES TAXJUDICIAL DECISIONS ON INDIRECT TAXES

Indirect Tax

CA.P.J.Johney FCA

A. RECENT ADVANCE RULINGS UNDER GST

Statute: Goods and Service Tax Decision in favour of: DEPARTMENT

Title: SONAL PRODUCT

R. B. MANKODI and G. C. JAIN (Members)

Citation: [2020] 75 GSTR 166 (AAR)Bench/Court: BEFORE THE AUTHORITY FOR ADVANCE RULING, GOODS AND SERVICES TAX, GUJARAT

Goods And Services Tax—Un-Fried Fryums — Clas-sification Rate Of Tax—”Un-Fried Fryums” Manufac-tured And Supplied Applicant Classifiable Under Tariff Item 2106 90 99 Of First Schedule To Customs Tariff Act, 1975—Taxable At 18 Per Cent (Cgst Nine Per Cent. + Ggst Nine Per Cent. Or Igst 18 Per Cent.) As Persl. No. 23 Of Schedule Iii Of Notification No. 1/2017-Central Tax (Rate) Dated June 28, 2017, As Amended, Issued Under Cgst 2017 And Notification No. 1/2017-State Tax (Rate) Dated June 30,2017, As Amended, Issued Under Ggst Act, 2017 Or Igst Act 2017- Gujarat Goods And Services Tax Act (25 Of 2017)—Intergrated Goods And Services Tax Act (12 Of 2017)—Integrated Goods And Services Tax Act (13 Of 2017)

Construction Of Taking Statutes-Word Not Defined In Statute Must Be Construed In Its Popular Sense.

Statute: GOODS AND SERVICE TAX Decision in favour of: DEPARTMENT

Title: INFINERA INDIA PVT. LTD.

D. P. NAGENDRAKUMAR and M. S. SRIKAR (Mem-bers)

Citation: [2020] 75 GSTR 371 (AAAR)Bench/Court: AAR KARNATAKA

Goods And Services Tax— Services — Intermediary — Definition Pre-Sate And Marketing Services Agreement Between IC In USA “And Appellant, Its Wholly Owned Subsidiary In India For Optical Networking Equipment Developed By Ic—Activity By Appellant Amount To Fa-cilitating Supply Of Products Between Two Parties Le., Principal In USA And Principal Customers In India-Ap-pelant Not Supplying Such Goods On His Own Ac-count—Is Intermediary Service-Liable To Tax-Integrat-ed Goods And Services Tax Act (13 Of 2017).S.2(13).


Title: MAANSMARINE CARGO INTERNATIONAL LLP

B. TIMOTHY and B. V. BORHADE

Citation: [2020] 75 GSTR 389 (AAR)Bench/Court: BEFORE THE AUTHORITY FOR ADVANCE RULING,GOODS AND SERVICES TAX, MAHARASHTRA

Goods And Services Tax—Taxable Value—Agent—Applicant Engaged In Outsourcing Work Of Managing Shipping Operations Of Hong Kong Based Shipping Company Involved In Worldwide Shipping Consultan-



cy And Logistics Arrangement Of Cargoes—Is Agent Management Fees Charged By Applicant—Gst Appli-cable—Reimbursement Of Expenses Such As Salaries, Rent, Office Expenses, Travelling Cost, Etc—On Facts Not Pure Agent—Gst Applicable-—-Central Goods And Services Tax Act (12 Of 2017),S.2(5) Maharashtra Goods And Services Tax Act (43 Of 2017), S.2(5)—Inte-grated Goods And Services Tax Act (13 Of 2017)S.13(8)(B)-Goods And Services Tax Valuation (Determination Of The Value Of Supply Of Goods And Services) Rules, 2016 R.7.


Title: MAHARASHTRA STATE POWER GENERATION COMPANY LIMITED, In re

B. V. BORHADE and PANKAJ KUMAR

Citation: [2020] 75 GSTR 180 (AAR)Bench/Court: BEFORE THE AUTHORITY FOR ADVANCE RULING,GOODS AND SERVICES TAX, MAHARASHTRA

Goods And Services Tax—Supply Of Service—Liquidated Damages — (Questions Whether GST Applicable On Liquidated Damages—Answer Depends On Facts Of Each Agreement And Attending Circum-stances—In View Of Agreement Between Applicant And B, GST Applicable On Liquidated Damages—Levy Covered Under Scheduled Entry No. 35 Of Notification No. 11/2017-Central/State Tax (Rate) (As Amended From Time To Time) For Taxable Services— Time Of Supply Defined As When Delay In Successful Com-pletion Of Trial Operation Established On Part Of Con-tractor-Where Delay Occurred Before GST Rollout And Some Part Of Delay Thereafter— Agreement Clauses Would Have To Be Referred To Determine Legislation Under Which Taxable— Amount Of Liquidated Damag-es Imposed Over Contractor/Vendor Whether Available As Input-Tax Credit To Him Not Answered As Proper Person To Raise This Question Contractor/Vendor And Not Applicant Maharashtra Goods And Services Tax Act (43 Of 2017), Sch. II ,Entry 5, Cl.(2)(E).

B.JUDICIAL DECISIONS ON INDIRECT TAXES

Statute: GOODS AND SERVICE TAX Decision in favour of: ASSESSEE

Title: DABUR INDIA LTD. VS COMMISSIONER OF CGST, GHAZIABAD AND OTHERS

BISWANATH SOMADDER AND AJAY BHANOT JJ.

Citation: [2020] 75 GSTR 91 (All) Bench/Court: IN THE ALLAHABAD HIGH COURT

Goods And Services Tax—Classification Of Goods—Odomos—Is Owered Under Chapter 38 Of Customs Tariff Act And Classified Under Hsn 3808 91 91—Not As Medicine Under Heading No. 3004 The Act—Cus-toms Tarirf Act (51 Of 1975)—Uttar Pradesh Goods And Services Tax Act (1 Of 2017). Judicial Review-Scope and limitation stated.Goods and Services Tax—Classification Of Goods—Principles.

Statute: GOODS AND SERVICE TAX Decision in favour of: ASSESSEE

Title: MAHAVEER PRASAD @ MAHAVEER PDVS STATE OF JHARKHAND AND ANOTHER

ANIL KUMAR CHOUDHARY J.

Citation: [2020] 75 GSTR 127 (Jharkhand)Bench/Court: IN THE JHARKHAND HIGH COURT

Goods And Services Tax—Offences And Prosecution — Obtaining Of Registration On Forged Rental Agree-ment And Wrongful Availment Of Input Tax Credit—Pe-tition For Anticipatory Bail—Submission Of Assessee That Assessee Had Already Vacated Premises In “Ues-tion At Time Of Inspection, That Assessee Had Closed Down Business And Shifted Permanently To Rajasthan And Was In Process Of Making Online Application For Cancellation Of Registration Certificate-High Court-Fit Case For Grant Of Anticipation Bail-Jharkhand Goods And Services Tax Act (12 Of 2017).S.132(1).

Statute: SERVICE TAX Decision in favour of: DEPARTMENT

Title: (1) BRANDAVAN FOOD PRODUCTs (Writ Ap-peal No. 262 of 2019)(2) R. K. ASSOCIATES AND HOTELIERS PVT. tp,(Writ Appeal Nos. 263 and 265 of 2019)(3) SATYAM CATERERS PVT. LTD. (Writ Appeal No. 264 of 2019)v. COMMISSIONER (APPEALS), CENTRAL AND STATE GOODS AND SERVICES TAX, RAIPUR, CH-HATTISGARH AND ANOTHER

P. R. RAMACHANDRA MENON C. J. and MANINDRA MOHAN SHRIVASTAVA J.

Citation: [2020] 75 GSTR 294 (Chhattisgarh)Bench/Court: IN THE CHHATTISGARH HIGH COURT

Service Tax— Appeal—Limitation—Condonation Of



Delay-High Court Filed Writ Appeal To Commissioner (Appeals)—Appeal Filed With Delay Of 253 Days Dis-missed As Time-Barred And Order Confirmed By Tribu-nal Writ Petitions Submitting That Delay Due To Per-sonal Tragedy As Petitioner’s Daughter Facing Martial Dispute—Dismissal As No “Extraordinary Circumstanc-es-Writ Appeal Contending That Another Ground In Re-lation To Demise Of Mother Of Petitioner Not Consid-ered By Single Judge-even if Accepted could not cover inordinate delay of 253 days during which appellant car-ried on Business activities –Not extraordinary circum-stance for interference by court invoking power under Article 226-No interference warranted-Constitution of India Arts.226-Finance Act (32 of 1994).s.85(3A).

Statute: SERVICE TAXDecision in favour of: ASSESSEE

Title: MANIPAL HEALTH ENTERPRISES PVT. LTDVs COMMISSIONER OF CENTRAI TAX, BENGALU-RU EAST, KARNATAKA

S. S GARG (Judicial Member) andP. ANJANI KUMAR (Technical Member)

Citation: [2020]75 GSTR 1 (CESTAT-Bang)Bench/Court: BEFORE THE CUSTOMS ,EXCISE AND SERVICE TAX APPELLATE TRIBUNAL -BANGALORE

Service Tax-Refund-Demerger-Effect Of Scheme-As-sessee Resultant Company In Scheme Of Demerger—Assessee Availing Of Taxable Services From Demerged Undertaking On Which Service Tax Charged And Was Paid To Government Prior To Demerger-Taxes Paid By Demerged Company With Regard To Demerged Un-der-Taking After Appointed Date But Prior To Effective Date Deemed As Tax Paid By Resultant Company-Con-duct Of Business With Effect From Appointed Date Until Effective Date By Demerged Company Was In Trust For Resultant Company—From Appointed Date Demerged Undertaking Of Demerged Company And Assessee Constitute Single Entity-Assessee Entitled To Refund Of Service Tax Paid-Central Excise Act (1 Of 1944),.S 11b-Finance Act (32 Of 1994),S.83.

Statute: VALUE ADDED TAXDecision in favour of: ASSESSEE

Title: EBM-PAPST INDIA PVT. LTD. Vs STATE OF UTTARAKHAND AND OTHERS

SUDHANSHU DHULIA J.

Citation: [2020] 75 GSTR 65 (Uttarakhand)Bench/Court: IN THE UTTARAKHAND HIGH COURT

Value Added Tax— Entries In Schedule—Goods Clearly Falling Under Schedule—Cannot Be Relegated To Re-siduary Clause— Specific Case Of Dealer That Instru-

ment Cooling Fans Designed, Manufactured And Sold Only As Part Of Telecommunication Equipment And Could Not Be Used For Purpose Other Than Cooling Telecommunication Equipment — That Excise Number Pertained To Electrical Goods Not Material—Instru-ment Cooling Fans Taxable Under Entry Pertaining To Telecommunication System As “Part Thereof” —Uttara-khand Value Added Tax Act (27 Of 2005),Sch, (B), Entry 3.

Reassessment —Condition Precedent— Reason To Believe Reasessment Necessary Should Be Record-ed—No Rebuttal Of Dealer’s Claim At Any Level —Department Seeking To Tax Goods Under Residuary Clause—No Justifiable Reason Shown -Reassess-ment Not Permissible-Utarakhand Value Added Tax Act (27 Of 2005) S.29.

Statute: VALUE ADDED TAXDecision in favour of: ASSESSEE

Title: COMMISSIONER OF GOODS AND SERVICES TAX, GURGAON-IIORANGE BUSINESS SOLUTIONS PVT. LTD.

ASHOK JINDAL (Judicial Member) andC. L. MAHAR (Technical Member)

Citation: [2020] 75 GSTR 307 (CESTAT-Chandigarh)Bench/Court: BEFORE THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL — CHANDIGARH BENCH

Service Tax-Exporter-Refund-Cenvat Credit-Input Ser-vices-Intermediary Service-Definition- Master Service Agreement Between Orange Business Netherland With Customers For Provision Of Managed Network Ser-vices Across Globe-Some Activities Of Procurement Of Networking Equipment For Customer,Installation/ Con-figuration Of Equipment, Etc., Outsourced To Service Centres - Administration Done Through Ensil, Where-by Global Customer Service Centre Executes Contract With Ensil For Proviso Of Services - Respondent, A Global Customer Service Centre In India For Orange Group-Provides Back Office Support Services To Or-ange Entities Globally—No Privy Contract With Any Customer Of Orange Group Entities-Nature Of Services Provided By Respondent Akin To Those Of Call Cen-tre/ Business Process Outsourcing (Bpo) Unit-Respon-dent Not Intermediary- Entitled To Refund Of Unutilized Cenvat Credit Availed On Input Services Used In Pro-viding Service Of Nature Of “Business Auxiliary Service Exported To Its Client Located Outside India Finance Act (32 Of 1994) –Cenvant Credit Rules ,2004-Notifica-tion No. 27/2012-Ce-(Nt) Dated June 18,2012.

10E-Newsletter Published by CA.Roy Varghese, Chairman, Ernakulam Branch of SIRC of ICAI , ‘ICAI Bhawan’,, Diwan’s Road, Ernakulam, kochi - 682016

Phone: 0484- 2362027. Email: [email protected]. Website: www.ernakulam-icai.org Editor: CA.Roy Varghese, Chairman, Ernakulam Branch of SIRC of ICAI

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October 2020 ERNAKULAM BRANCH