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CGST Act IGST Act UTGST Act GST (Compensation to the States) Act Addendum to the GST Rate Schedule - 03.06.2017 101st Constitution Amendment Act, 2016 Addendum to the GST Rate Schedule - 18.05.2017 GST Compensation Cess Rates Decided in the GST Council Meeting held on 18.05.2017 Chapter Wise Rate wise GST Schedule - 03.06.2017 Chapter wise GST Rate Schedule for Goods Decided in the GST Council Meeting held on 18.05.2017 Revised Threshold for Composition Scheme - 11.06.2017 IGST Exemptions Approved by the GST Council - 11.06.2017 GST Rates Approved by the GST Council - 11.06.2017 Service Tax Exemptions in GST IGST Exemption, Concession List - 03.06.2017 Composition - Rules Valuation Rules ITC - Rules Invoice, Debit & Credit Notes - Rules Payment - Rules Refund - Rules Registration - Rules Return- Rules Transition Rules Proposed CTD Document Accounts and Record Rules GST rate Schedule for Services Decisions Taken by the GST Council in the 16th Meeting - 11.06.2017 List of Services under Reverse Charge Classification Scheme for Services Under GST
kosom ammar
CEO 2013 All 156
[Date of Order: 2013-11-22]
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STO 2013 Guj 1716
[Date of Order: 2013-11-13]
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STO 2013 Del 1630
[Date of Order: 2013-11-13]

Service Tax: Quashing of Explanation to Notification No. 15/2004-ST dated 10th September, 2004 and Notification No. 18/2005-ST dated 7th June, 2005 and in Notification No. 1/2006-ST dated 1st March, 2006, the challenge is with respect to column 4 entries at S. No. 5, 7 and 10: Bifurcation of works contract into service portion and sale of goods: Scope: Service tax in the facts in question has been imposed in three stages. In the first stage, service tax was imposed on construction of industrial and commercial complexes. In the second stage, service tax was imposed on residential complexes of 12 or more residential units and in the third stage, service tax was imposed on works contracts of any nature except for the exclusion in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Each provision or levy has its own scope and ambit, while the first two provisions were primarily specific and targeted, the third inclusion i.e. works contract is very broad and wide term and will include within its ambit and scope construction of industrial and commercial complex or construction of residential complexes as specified. Introduction and imposition of service tax on works contract by Finance Act, 2007 does not mean that we have to read down, the scope and ambit of the provisions enacted levy tax on contracts relating to "commercial and industrial construction. service or "construction of (residential) complexes" services as specified by Finance Act 2004 and Finance Act 2005 respectively.After 46th Amendment to the Constitution, composite contracts can be bifurcated to compute value of the goods sold/supplied in contracts for construction of buildings with labour and material. Relevant case law Full Bench of this court in Home Solutions Retail (India) Ltd. vs. UOI & Anr. 182 (2011) DLT 548 (FB) = (2011-TIOL-610-HC-DEL-ST-LB), Tamil Nadu Kalyana Mandapam Asscn. vs. UOI and Ors. (2004) 267 ITR 9 (SC) = (2004-TIOL-36-SC-ST), K. Raheja Development Corpn. Vs. State of Karnataka (2005) 5 SCC 162 = (2005-TIOL-77-SC-CT), Larsen & Toubro Limited versus State of Karnataka, Civil Appeal No.8672/2013 = (2013-TIOL-46-SC-CT-LB), Federation of Hotel and Restaurant Assn. of India v. Union of India [(1989) 3 SCC 634 : AIR 1990 SC 1637] = (2002-TIOL-699-SC-MISC) is supportive.

The service portion of the composite contracts can be made subject matter of service tax. Aspect doctrine is applied for bifurcating/vivisect the composite contract, Gannon Dunkerley and Co. vs. State of Rajasthan (1993) 1 SCC 364 = (2002-TIOL-103-SC-CT).

(2) Service tax can be levied on the service component of any contract involving service with sale of goods etc. Computation of service component is a matter of detail and not a matter relating to validity of imposition of service tax. It is procedural and a matter of calculation. Merely because no rules are framed for computation, it does not follow that no tax is leviable.

(3) The notifications in question are in alternative and optional. An assessee may take advantage or benefit of the notifications, but cannot be compelled to pay service tax on the proportion or value of a composite contract as per the notification. This is because the formula framed by way of delegated legislation is presumptuous and based on assumption.

(4) However, if an assessee wants to take benefit of the notification, he must comply and adhere to the terms and conditions stipulated as per the notification.

(5) An assessee to claim benefit or advantage as per a notification must meet the preconditions or stipulations stated therein. An assessee cannot take benefit or advantage of a part of a notification but claim that the other part of the notification should be ignored and thus not acted upon. Notification has to be applied in entirety.

(6) Notification has to be read as a whole keeping in mind its objective and purpose. Notification may provide a convenient, hassle free and adopt a non-discretionary formula for computing value of the service element in a composite contract. This curtails litigation, ambiguity, ensures clarity and consistency. A notification cannot be declared as invalid or ultra vires for this reason, provided it is optional.

(7) Authorities cannot compel and force an assessee to accept the notifications in question and pay tax accordingly, as seeking coverage under the notification is voluntary. An assessee can state that the service component of a composite contract should be computed in a fair and reasonable manner and accordingly taxed.

(8) The notifications meet the tests laid down under Section 93 and 94 of the Act because they relate to manner and mode of computation of service tax in a composite contract. The object and purpose is not to tax as non-service element or to include non-taxable part of the composite contracts.

(9) It has not been shown and established that the formula or the value prescribed in the notifications is absurd or irrational. The said notifications are not per se an arbitrary exercise and contrary to data or formula for computing service element. In taxation matters, classification should not be struck down as discriminatory unless there are strong and compelling reasons that show absurdity and, therefore, violation of Article 14 of the Constitution.(Para 36).

Writ petitions dismissed.

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CEO 2013 Mad 57
[Date of Order: 2013-10-31]
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CEO 2013 Bom 45
[Date of Order: 2013-10-10]
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CEO 2013 All 54
[Date of Order: 2013-10-08]
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STO 2013 Mad 1734
[Date of Order: 2013-10-04]
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STO 2013 All 824
[Date of Order: 2013-09-16]

Service Tax - Unless VCES application is considered and decided, no proceedings under Section 87 (Recovery). The object of the VCES may be defeated, if the recovery is allowed to proceed: The Department initiated recovery proceedings under Section 87, even as the petitioner's application under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 was pending: Prima facie demonstrated that he fulfills the conditions under prescribed Section 106 and 107 of the Finance Act, 1994 as amended by Finance Act, 2013 and that unless application is considered and decided, no proceedings under Section 87 may be allowed to continue. The object of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 may be defeated, if the recovery is allowed to proceed. The petitioner's application under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 made on 20th June, 2013 to be decided by the Commissioner of Central Excise (competent authority) within a period of 60 days. until disposal of the application dated 20th June, 2013, the recovery proceedings including operation of the impugned notice dated 7.6.2013 under Section 87 of the Finance Act, 1994 issued by the Deputy Commissioner (AE), Central Excise and Service Tax Noida shall remain suspended. The bank accounts shall be released by the respective banks .

Interim Order allows petition.

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STO 2013 Guj 1719
[Date of Order: 2013-09-12]
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CEO 2013 All 46
[Date of Order: 2013-09-05]
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STO 2013 Bom 1683
[Date of Order: 2013-08-14]
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CEO 2013 Bang 41
[Date of Order: 2013-08-06]
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CEO 2013 Del 58
[Date of Order: 2013-08-02]
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CEO 2013 Del 35
[Date of Order: 2013-08-02]
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CEO 2013 All 153
[Date of Order: 2013-07-25]
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STO 2013 Mad 1670
[Date of Order: 2013-07-05]
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STO 2013 Ker 1368
[Date of Order: 2013-07-03]

Service Tax: Services provided by a restaurant, having the facility of air-conditioning in any part of the establishment, which has licence to serve alcoholic beverages, in relation to serving of food or beverage: Constitutional validity of sub clause (zzzzv) and (zzzzw) of clause 105 of Section 65 of the Finance Act, 1994 and Section 66 of the Finance Act, 1994 as amended by the Finance Act 2011 relating to levy of service tax on taxable services: Scope: In Assn. of Leasing & Financial Service Companies v. Union of India, (2011) 2 SCC 352) =(2010-TIOL-87-SC-ST-LB), Supreme Court considered that “the question was whether such connections constituted a sale or a service or both. If it was a sale then the States were legislatively competent to levy sales tax on the transaction under Entry 54, List II of the Seventh Schedule to the Constitution. If it was service then the Central Government alone had the legislative competence to levy service tax under Entry 97, List I and if the nature of the transaction partook of the character of both sale and service, then the moot question would be whether both the legislative authorities could levy their separate taxes together or only one of them. It was held that the subject transaction was a service and, thus, Parliament had legislative competence to levy service tax under Entry 97, List I. In the circumstances the question of splitting up of transactions, does not arise.(Para 8)

There are two judgments which throws light on the subject matter in issue. Those are K. Damodarasamy Naidu & Bros. v. State of T.N., (2000) 1 SCC 521) = (2002-TIOL-884-SC-CT-CB)and T.N. Kalyana Mandapam Assn. v. Union of India, (2004) 5 SCC 632) = (2004-TIOL-36-SC-ST). In fact, the effect of Article 366(29-A)(f) has been considered by the Supreme Court in . of Leasing & Financial Service Companies v. Union of India, (2011) 2 SCC 352) =(2010-TIOL-87-SC-ST-LB) and other judgments referred above including BSNL v. Union of India, (2006) 3 SCC 1) = (2006-TIOL-15-SC-CT-LB). But the factual situation with reference to the case on hand is available only in the cases referred above. But it could be seen that in T.N. Kalyana Mandapam Assn. (Supra) the question was with reference to services rendered by mandap-keepers which is not the situation here. Here the factual situation is almost similar to the statement of law as held by the Supreme Court in K. Damodarasamy Naidu. It can be seen from Article 366(29-A) (f) that service is also included in the sale of goods. If the constitution permits sale of goods during service as taxable, necessarily Entry 54 has to be read giving the meaning of sale of goods as stated in the Constitution. If read in that fashion, necessarily service forms part of sale of goods and State Government alone will have the legislative competence to enact the law imposing a tax on the service element forming part of sale of goods as well, which they have apparently imposed. (Para 18,20)

Regarding the imposition of service tax in respect of hotel, inn, guest house, club or camp site etc., the contention of the petitioners is based on Entry 62 of List II. What exactly is the meaning of the expression "luxuries" in Entry 62 of List II has been held by the Constitution Bench judgment of the Supreme Court in Godfrey Phillips India Ltd. v. State of U.P., (2005) 2 SCC 515) = (2005-TIOL-10-SC-LT-CB), wherein it is held that luxuries is an activity of enjoyment or indulgence which is costly or which is generally recognised as being beyond the necessary requirements of an average member of the society. While giving the said meaning to Entry 62 and if we look at the sub Clause (zzzzw), the service tax is imposed on services provided in a hotel and other similar establishments when State Legislature had enacted the Kerala Tax on Luxuries Act by exercising their legislative power under Entry 62 of List II. When applying the dictum laid down in Godfrey Philips India Ltd. (Supra) which gives an extended meaning to the word "luxuries", the amendment now made to the service tax trenches upon the legislative function of the State under Entry 62 of List II.

Having come to the aforesaid findings, i) It is declared that sub Clauses (zzzzv) and (zzzzw) to Clause 105 of Section 65 of the Finance Act 1994 as amended by the Finance Act 2011 is beyond the legislative competence of the Parliament as the sub Clauses are covered by Entry 54 and Entry 62 respectively of List II of the Seventh Schedule.(Para 21)

Petitions allowed.

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STO 2013 Mad 1728
[Date of Order: 2013-06-27]
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CEO 2013 Bom 38
[Date of Order: 2013-06-14]
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CEO 2013 Mad 165
[Date of Order: 2013-06-14]
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