Legal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

Authority for Advance Ruling (AAR)

Gujarat Authority for Advance Ruling| ‘Combined Wire Rope’ not a part of the fishing vessel, thus, not eligible for GST at 5 percent

In an application sought for advance ruling on the question that whether Goods and Services Tax (GST) rate of 5 percent under entry No. 252 of Schedule 1 of Notification No. 1/2017 of Central Tax Rate and a corresponding notification issued by Gujarat State and Notification No. 1/2017 of Income Tax Rate is applicable in the case of “Combined Wire Rope” used as a part of a Fishing Vessel, the two-member bench of Milind Kavatkar and Amit Kumar Mishra has ruled that the combine wire rope has no use in the fishing vessel, but it is used to tie the fishing net, thus, it is not covered under entry No. 252 of Schedule 1 of Notification No. L/20l7 of Central Tax (Rate) and is not eligible for GST at 5 percent.

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Maharashtra Appellate Authority for Advance Ruling | “One Stop Crises Centre” Scheme can be construed as subsidy, not subject to GST; Set aside MAAR ruling

In an appeal filed under Section 100 of the Central Goods and Services Tax Act, 2017 (‘CGST’) and the Maharashtra Goods and Services Tax Act, 2017 (‘MGST’) being aggrieved by the advance ruling passed by the Maharashtra Authority of Advance Ruling (MAAR), the two-member bench of Ashok Kumar Mehta and Rajeev Kumar Mital while setting aside the ruling passed by the MAAR, held that since the impugned activities undertaken by the appellant are not construed as “supply” in terms of section 7(1)(a) of the CGST Act, 2017 the reimbursement amount paid by the Maharashtra Government to the appellant for undertaking the activities specified under “One stop Crises Centre Scheme” floated by the Central Government, will not be subject to the levy of GST.

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What is the HSN code and GST rate for a Mechanical Sprayer? Gujarat Authority for Advance Ruling answers

In an application sought for advance ruling on the question that, what is the Harmonized System of Nomenclature (HSN) and Goods and Services Tax (GST) rate of Kirloskar power sprayer, the two-member bench Milind Kavatkar and Amit Kumar Mishra has ruled that the 8-digit HSN code of the applicant’s product is 8424 89 90 and the applicable GST rate would be l8 percent.

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Gujarat Authority for Advance Ruling| GST is not leviable on the amount representing employees’ portion of canteen and transportation charges

The two-member bench Milind Kavatkar and Amit Kumar Mishra has ruled that Goods and Service Tax (GST) is not leviable on the amount representing the employees portion of canteen and transportation charges, which is collected by the applicant and paid to the third party, and as the provision of services of transports and canteen facility to its employees is as per the contractual agreement between the employee and the employer in relation to the employment, thus such provision cannot be considered as supply of goods or services, and hence, cannot be subjected to GST.

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National Company Law Appellate Tribunal (NCLAT)

Whether Adjudicating Authority is competent to pass order under Section 66 of IBC during subsistence of moratorium under Section 14 of IBC? NCLAT answers

While deciding an issue as to whether the adjudicating authority is competent to pass an order under S. 66 of Insolvency and Bankruptcy Code, 2016 during the subsistence of moratorium under S. 14 of IBC, a 3-judge bench comprising of Ashok Bhushan, M. Satyanarayana Murthy*, JJ., and Barun Mitra (Technical Member), held that the moratorium issued under S. 14 of the IBC does not bar proceedings against the resolution professional for defrauding the creditors of its Corporate Debtor.

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Non-payment of full provident fund and gratuity violative of S. 30(2)(e) IBC; NCLAT directs Jet Airways to make payments

In a batch of appeals filed challenging order dated 22-06-2021 passed by the National Company Law Tribunal (NCLT), Mumbai approving the Resolution Plan submitted by ‘Jalan Fritesch Consortium’ with respect to the Corporate Debtor — ‘Jet Airways (India) Limited’ on various grounds primarily being non-payment of full provident fund, gratuity, leave encashment etc to the employees and workmen who are rightly entitled to it, a Division Bench of Ashok Bhushan J. (Chairperson) and Barun Mitra J. (Technical Member) held that non-payment of full provident fund amount to the workmen and employees and the gratuity payment till the insolvency commencement date amounts to noncompliance of provisions of Section 30(2)(e) of Insolvency and Bankruptcy Code, 2016 (IBC) finding no other parts of the resolution plan to be infirm in any manner. The Court further directed the Successful Resolution Applicant to make pending payments of provident fund and gratuity to the workmen and the employees.

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Competition Commission of India (CCI)

“Fair market opportunity is the hallmark of competition”; CCI imposes hefty monetary penalty on MakeMyTrip, Goibibo and OYO for their anti-competitive practices and abuse of dominant position

In a significant development, the Commission while deliberating upon the alleged contravention of Sections 3 and 4 of the Competition Act by MakeMyTrip, Goibibo and OYO, was of the view that the commercial arrangement between OYO and MakeMyTrip and Goibibo which led to the delisting of FabHotels, Treebo and the independent hotels, which were availing the services of these franchisors, was anti-competitive and abuse of dominant position within the meaning of Section 3(4)(d) read with Section 3(1) of the Competition Act.

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Google faces penalty of Rs. 1337.76 crores for abusing its dominant position in multiple markets in the Android Mobile Device Ecosystem; Cease and Desist order issued

The Commission Bench comprising of Ashok Kumar Gupta (Chairperson), Sangeeta Verma and Bhagwant Singh Bishnoi (Members) in a significant 293-page ruling, imposed a heavy penalty on Google of Rs. 1337.76 crores for abusing its dominant position in multiple markets in the Android Mobile device ecosystem thereby contravening Sections 4(2)(a)(i), Section 4(2)(b)(ii), Section 4(2)(c), Section 4(2)(d) and Section 4(2)(e) of the Competition Act.

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Income Tax Appellate Tribunal (ITAT)

Why did ITAT decide to delete the addition of streedhan as ‘unexplained investment’ for the purposes of income assessment? Read to know

While deciding the instant appeal revolving around the addition of the assessee’s generational streedhan as unexplained investment for the purposes of income assessment, the Bench of Sandeep Gosain (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member), held that the AO ignored and failed to verify the factual position in the instant matter whereby which it was clear that the assessee lives with his parents and belongs to the high-status Rajput family where it is traditional to have jewellaries received from mother and wife in the form of streedhan. The Tribunal, keeping in mind the high status, family tradition, deduction on account of purity and the deduction towards streedhan, held that the excess jewellary found during search was nominal and the addition sustained by the CIT(A) deserves to be deleted on the grounds raised by the assessee.

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Central Information Commission

No information of the third parties can be sought via the RTI Act without their consent

In a second appeal filed by the appellant under Section 19 of the Right to Information Act, 2005 on the ground of arbitrary denial of information by the Chief Public Information Officer (CPIO), the Chief Information Officer, Amita Pandove has held the information sought by the appellant was rightly denied by the CPIO as it pertains to the third party who expressed their dissent from divulging the same to any other third party.

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Central Information Commission directs All India Chess Federation to furnish its expenditure in case against Competition Commission of India

Central Information Commission directs All India Chess Federation to furnish its expenditure in case against Competition Commission of India In the second appeal filed by the appellant under Section 19 of the Right to Information Act, 2005 (‘Act’) on the ground of unsatisfactory reply furnished by the Chief Public Information Officer (‘CPIO’), the Chief Information Officer, Amita Pandove has directed the CPIO, All India Chess Federation (‘AICF’), to provide relevant information regarding the expenses incurred by AICF, since it is a public authority and uses public money.

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News Broadcasting & Digital Standards Authority (NBDSA)

News 18 debate programme violative of the Code of Ethics & Broadcasting Standards and principles under the Specific Guidelines Covering Reportage; News Broadcasting & Digital Standards Authority imposes fine of Rs. 50,000/- on the broadcaster

In a complaint regarding a debate programme aired on News18 India on 6.4.2022, wherein the anchor Aman Chopra referred to the Muslim students as “Hijabi Gang”, “Hijabwali Gazwa Gang” and made a false allegation that they had resorted to rioting, A.K Sikri (Chairperson) held that the impugned programme was violative of the principles relating to impartiality, neutrality, fairness and good taste & decency under the Specific Guidelines Covering Reportage, apart from the Code of Ethics & Broadcasting Standards.

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Securities and Exchange Board of India (SEBI)

SEBI imposes a penalty of Rs. 2.25 crores on Bombay Dyeing and Rs. 11 crores on Wadia Group for misrepresenting financial statements

The Bombay Dyeing and Manufacturing Company Ltd. (‘BDMCL’) and some of its promoters (Nusli Wadia, Ness Wadia and Jehangir Wadia) has been barred from the securities market for 2 years for violating the provisions of SEBI (Prevention of Fraudulent and Unfair Trade Practices) (‘PFUTP’) Regulations, 2003 by misrepresenting the financial statement of BDMCL originating from year 2011 until 2019.

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Maharashtra Real Estate Regulatory Authority (MRERA)

Maharashtra RERA| Saif Ali Khan to get possession of his office unit in Indian Newspaper Society within a period of 15 days, with interest for delayed possession

In a complaint filed for seeking directions to the respondent to handover the possession and to pay interest/ compensation for the delayed possession as per the provisions of section 18 of the Real Estate (Regulation & Development) Act, 2016 (‘RERA’), Mahesh Pathak (Member) has directed the respondent to handover possession of the said units to Saif Ali Khan-complainant within a period of 15 days from the date of this order and directed to pay interest for the delayed possession to Saif Ali Khan from 1.02.2018 till 12.02.2021. Further, the respondent is entitled to claim the benefit of “moratorium period” as mentioned in the Notifications issued by the Authority. Moreover, it directed Saif Ali Khan to pay interest for the delayed payment from the date of default till the actual date of payment at the rate prescribed under RERA i.e. Marginal Cost Lending Rate (MCLR) of SBI plus 2%.

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District Consumer Dispute Redressal Commission

Why Uber India was held liable for the cab driver whose negligence caused the complainant to miss her flight to Chennai?

In a significant decision delivered in August over a complaint alleging deficiency of service on part of Uber India Systems, the Bench of R.P. Nagre (President-in-Charge), G.M. Kapse and S.A. Petkar (Members) held that Uber India is liable for providing deficient services on behalf of the cab driver in the instant case, whose negligence caused the complainant to miss her flight to Chennai. It was further held that Uber India’s liability was caused as the driver was acting as an agent of the Company while receiving the consideration i.e., the cab fare.

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*Kriti Kumar, Editorial Assistant has put this roundup together.

AAR
Advance RulingsCase Briefs

   

Authority for Advance Ruling (Karnataka): In an application filed to sought advance ruling regarding the classification of the applicant’s product, the two-member bench of M.P Ravi Prasad and T. Kiran Reddy has ruled that the bus air-conditioning system inclusive of rooftop unit, compressor and installation kit for one consolidated price to a single customer merits classification under heading 84152010; and when sold to single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit then under heading 84152010; and when rooftop unit, compressor and installation kit sold individually or in combination then under heading 8415.90.00.

In the present case, the applicant manufactures and supplies Bus Rooftop air conditioning systems which include Rooftop Unit, Compressor and Installation kit; undertakes installation and servicing of air conditioning system as per the requirement of customers through dealer network, and specially caters exclusively to the needs of passenger buses.

The applicant sought advance ruling on the following questions:

  1. Classification of bus air-conditioning system inclusive of rooftop unit, compressor and installation kit for one consolidated price to a single customer

  2. Classification of rooftop unit, compressor and installation kit sold to single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit

  3. Classification of rooftop unit, compressor and installation kit sold as mentioned below:

    • Roftop unit alone

    • Rooftop unit and compressor

    • Compressor

    • Installation kit

    • Compressor and installation kit

    • Rooftop unit and installation kit

    • Rooftop unit and compressor

The Authority took note of the explanation (iii) and (iv) given in Notification No. 1/2017 of the Central Tax Rate that is relevant to the classification of the goods under GST and observed that Chapter 84 of the Customs Tariff Act covers machinery and mechanical appliance and parts thereof, and heading 8415 covers Air conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including those machines in which the humidity can’t be separately regulated. Further, heading 841520 covers air conditioning machines of a kind used for persons in motor vehicles and the heading 84152010 covers the said machines for buses.

The Authority viewed that in the present case, the applicant supplies air conditioning system, comprising rooftop unit, compressor and installation kit, as a single product for a consolidated price for a single customer, exclusively for buses. Thus, the said air conditioning system for buses merits classification under heading 84152010 as the same is specifically classified under the said heading.

The Authority concerning the second question noted that the applicant is supplying bus air condition system, only comprised of all the three major components, but the price of individual components has been negotiated and agreed separately for each of the units and these parts are meant for a single fitting at customer end. Further, the Authority referred to Notes 2 to 5 of Section XVI of the Customs Tariff Act, 1975, and observed that Note 3 provides that parts of composite machines consisting of two or more machines fitted together to form a whole are to be classified as if consisting only of that component or as being that machine, which performs the principal function. Further, as per Note 4, where a machine consisting of individual components intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or 85, then the whole falls to be classified in the heading appropriate to that function. Thus, the product of the applicant amounts to supply of a composite machine designed for the purpose of performing the principal function of a bus air conditioning system, and hence such supply is classifiable under tariff heading 84152010 and attracts GST accordingly.

The Authority regarding the third question observed that the Rooftop unit and installation kits are not classified individually under the Customs Tariff Act, 1975, but are identifies /recognised as parts of the composite machine i.e., air conditioning system for a bus. Thus, they merit classification under parts of air conditioning machines. Further, the gas compressor of the kind used in the air conditioning equipment is classified under tariff heading 84148011.

[Eberspaecher Suetrak Bus Climate Control System India Pvt. Ltd., In re, Advance ruling no. KAR ADRG 34/2022]


Advocate who appeared in this case :

Represented by: CA Anant Nyamannavar

AAR GST
Advance RulingsCase Briefs

Authority for Advance Ruling (Karnataka): In a case relating to whether the services, including education and training to farmers with regard to agro forestry through scientific research and knowledge are covered under ‘Agricultural extension Services’, and whether the applicant can avail tax exemption on such services, the two-member bench of M.P Ravi Prasad (State) and T. Kiran Reddy (Central) observed that the services being provided by the applicant are covered under ‘agricultural extension services’, thus, exempted from tax.

The Authority noted that the applicant provides services by appointing Mara Mitras- the Agriculture Extension Workers (AEW), to educate and train farmers regarding agro forestry by applying scientific research and knowledge. Further, the applicant’s activity includes promotion of tree-based agriculture, farmer enrolment, conducting proof of plant surveys and survival surveys, and inventory tracking at nurseries etc. Moreover, the applicant allocates the Mara Mitras to the talukas or gram panchayat, where they visit the farmers to enroll them in agroforestry schemes, register demand for saplings and document the data etc.

The Authority observed that, from the scope of work it is seen that the applicant through their Mara Mitras not only educate and train farmers regarding agro forestry through scientific research and knowledge but are also involved in hand holding the farmers from recording demand for saplings, picking up the saplings from the nurseries to their plantation, and also, monitor post plantation survival.

The Authority further noted that the term ‘agricultural extension’ is defined as “application of scientific research and knowledge to agricultural practices through farmer education or training”, and observed that the applicant through Mara Mitras also provides services such as selection of saplings, assistance in transportation, monitoring the survival of plants etc that are related to agricultural extension activity, hence, it ruled that the services being provided by the applicant are covered under agricultural extension services, thus, exempted from tax as per Entry No.57 of Notification No. 9/2017 of the Integrated Tax Rate.

[Avani Infosft Private Ltd., In Re, 2022 SCC OnLine Kar AAR-GST 13, decided on 12-08-2022]


Advocates who appeared in this case :

Mallikarjun Patil, Advocate, Present for the applicant.

AAR GST
Advance RulingsCase Briefs

Authority for Advance Ruling, Karnataka: In a case relating to whether printing of stationery items for conduct of examinations would amount to supply of service or supply of goods, the two-member bench of M.P Ravi Prasad (State) and T. Kiran Reddy (Central) has stated that the provisions of Central Goods and Services Tax Act ,2017 (CGST Act) and Karnataka Goods and Services Tax Act, 2017 (KGST Act) are in pari materia, which means they have the same provisions but differ only on specific provisions, and held that if the activity of printing gives essential character to the printed product, it will be a supply of service and if the usage of product gives essential character, it will be supply of goods.

The issues before the Court were whether the printing of stationery items such as question papers, admit cards, answer booklets cards, ID cards and other formats used for and during examinations, envelopes for packing answer booklets, on contract basis for Karnataka Secondary Education Examinations Board and utilised for the conduct of examinations, would constitute a supply of service or supply of goods to an “educational institution” and if this is true, whether there will be no tax on supply of such service or good by the applicants.

The authority noted that the material for printing the question papers, answer booklets etc. relating to the examinations are supplied by the board and the usage rights of the material are owned by the board, only physical inputs used for printing are provided by the applicant. In the present case, the applicant is supplying printed question paper, admit cards ,circulars, ID cards etc., printed with the content supplied by the recipient, hence, supply of printing is the principal supply, thus, it would constitute supply of service to an educational institution.

The authority observed that the applicant is also supplying answer booklets, other formats used for and during examinations and envelopes for packing answer booklets printed with the content supplied by the recipient, hence, the usage of products is essential, and printing of content is an ancillary activity, thus, it would constitute supply of goods to an “educational institution”.

Moreover, clause(iv) of the Notification No.14/2018 of the Central Tax Rate, expressly states that the Central and State Boards should be treated as educational institutions for the purpose of providing services by way of examination to the students.

It further held that the services provided by the applicant to educational institutions by way of printing stationery pertaining to the conduct of examinations is exempted from tax as per Entry No.66 of the Notification no.12/2017 of the Central Tax Rate, and supply of answer booklets and other formats used for and during examinations falling under the heading 4802 is taxable as per entry No.112 of the Schedule II of the Notification No.1/2017 of Central Tax rate.

[P.K.S Centre for Learning, In re, 2022 SCC OnLine Kar AAR-GST 12, decided on 12-08-2022]


Advocates who appeared in this case :

Sankari V. Krishnan, Advocate, Counsel for the Applicant.