States GST & VAT - Entry 119 of Part-II of Sch. B—Classification of goods—Tyres and tubes used in tractor-trolley—Rate of tax Maa Santoshi Engineering v. State of Odisha (2023) 114 ITPJ (SG) 483 (Orissa-HC) : 2023 TaxPub(VAT) 79 (Ori-HC) : (2023) 384 ELT 20 (Ori):(2023) 112 GSTR 247 (Ori) States GST & VAT - Section 42(5)—Penalty under section 42(5)—Penalty imposed pursuant to audit assessment—Discretionary power of Revenue to decline penalty—Validity of Maa Santoshi Engineering v. State of Odisha (2023) 114 ITPJ (SG) 483 (Orissa-HC) : 2023 TaxPub(VAT) 79 (Ori-HC) : (2023) 384 ELT 20 (Ori):(2023) 112 GSTR 247 (Ori) States GST & VAT - Section 27—Ressessment—Orders passed without a fair and complete opportunity—Violation of principles of natural justice—Validity of VCNR Builders & Developers Ltd. v. Asstt. CCT (2023) 114 ITPJ (SG) 480 (Karn-HC) : 2023 TaxPub(VAT) 185 (Karn-HC) States GST & VAT - Section 27—Re-assessment—Assessment of escaped turnover—Limitation period Noble Tech Industries (P) Ltd. v. Office of the Asstt. Commr. (ST) (2023) 114 ITPJ (SG) 485 (Mad-HC) : 2023 TaxPub(VAT) 186 (Mad-HC) States GST & VAT - Section 5—Levy of penalty—Self consumption of petrol—Disallowance of shortages regarding evaporation loss—Scope of order of the tribunal Indian Oil Corpn. Ltd. v. J & K Sales Tax Appellate Tribunal (2023) 114 ITPJ (SG) 479 (J&K-HC) : 2023 TaxPub(VAT) 197 (J&K-HC) States GST & VAT - Section 48—Recovery of dues—Priority of charge—Overriding effect of SARFAESI Act over VAT Act—Validity of Nilesh Keshavlal Modi v. State of Gujarat (2023) 114 ITPJ (SG) 478 (Guj-HC) : 2023 TaxPub(VAT) 105 (Guj-HC) States GST & VAT - Section 3(9)—Levy of tax—Goods found in transporter’s godown—Failure to furnish information regarding receipt of goods—Validity of Rashtriya Transport Corpn. v. Commr. of Delhi GST (2023) 114 ITPJ (SG) 477 (Del-HC) : 2023 TaxPub(VAT) 190 (Del-HC) States GST & VAT - Section 22(1)—Revision assessment—Disallowance of Input Tax Rebate without any assessment order—Sellers did not deposit tax collected from assessee—Validity of Piramal Petrolium (P) Ltd. v. State of Chhattisgarh (2023) 114 ITPJ (SG) 476 (Chhat-HC) : 2023 TaxPub(VAT) 187 (Chhatt-HC) States GST & VAT - QUESTION : Applicant undertakes Contracts/Sub-Contracts of the entire work for. Operation and Maintenance of Water Supply Projects/ Sewerage Projects/Facilities. The applicant has been awarded a sub-contract by the Principal Contractor out of the Original Contract as received by them from State of Telangana, Mission Bhagiratha. The sub contract agreement as carved out of the Principal Contract clearly indicates scope of the work to be undertaken and obligations of such sub-contractor. Further, the conditions of sub- contract provides that sub-contract agreement is liable to termination if the work is not executed and maintained as per Guidelines of Mission Bhagiratha, as agreed by client viz State Government of Telangana. In the Contract so executed by the Principal Contractor, total value of supply of Goods constitutes not more than 25% of the Sub- Contracted value (as can be verified from the Contract so awarded) and therefore exempted from payment of GST in terms of entry 3A in Notification No 12/2017 - Central Tax (Rate) as amended by Notification No. 2/2018 Central Tax (Rate) dated 25/01/2018. Further, the Sub Contract so executed between the Applicant and the Principal Contractor, is only for supply of Man Power – which is Pure Service and hence exempted from payment of GST in terms of Entry 3 in Notification No 12/2017 - Central Tax (Rate) as amended by Notification No. 2/2018 - Central Tax (Rate) dated 25/01/2018. The applicant sought advance ruling on the following questions: (a) Whether the supply of Services by the Applicant to M/S. THE INDIAN HUME COMPANY LTD. is covered by Notification No. 12/2017-Central Tax (Rate), dated 28-11-2017 as amended by Notification No 2/2018 - Central Tax (Rate) dated 25/01/2018; (b) If the supplies as per Question (a) are covered by Notification No. 12/2017 Central Tax (Rate), dated 28-11-2017 as amended by Notification No 2/2018 Central Tax (Rate) dated 25-1-2018, then what is the applicable rate of Tax under the Goods and Services Tax Act, 2017 on such Supplies; and (c) In case if the supplies as per Question (a) are not covered by the Notification supra then what is the applicable rate of tax on such supplies under the Goods and Services Tax Act, 2017. RULING : (a) No. The supply of services by the applicant to M/S. THE INDIAN HUME COMPANY LTD. is not covered by Notification No. 12/2017-Central Tax (Rate), dated 28-11-2017 as amended by Notification No 2/2018 - Central Tax (Rate) dated 25/01/2018. (b) Not applicable; and (c) In case if the supplies as per Question are not covered by the Notification supra then the applicable rate of tax on such supplies under the Goods and Services Tax Act, 2017 would be 9% CGST + 9% SGST. Immense Construction Co., In re (2023) 114 ITPJ (SG) 487 (AAR) States GST & VAT - QUESTION : Applicant is into the manufacture & supply of pre-engineered buildings and storage racking systems. The applicant is providing canteen and transportation facilities to its employees at subsidized rates as per the terms of the employment agreement entered between the applicant and the employee. The applicant provided copies of employment agreement. In the agreement, it was enshrined that the “Company will provide transportation and canteen facility at subsidized rates as per the policy from time to time”. The applicant further submitted that by virtue of section 46 of the Factories Act, 1948, they are obliged to run and maintain a canteen for their employees. That for this purpose the applicant is procuring canteen services from a third party who in turn is issuing invoice to the applicant by charging GST at a rate of 5%. In this scenario: (i) According to the applicant the canteen facilities provided to its employees do not qualify as supply under section 7 of the CGST Act and therefore no GST is leviable on the same. (ii) The applicant further relied on clarification provided by CBIC in Circular No. 172/04/2022 dated 6-7-2022 and the Press Release No. 73/2017 dated 10-7-2017 wherein it was clarified by the CBIC that prerequisites provided by the employer to its employees in terms of contractual agreement will not be subjected to GST. (iii) Further the applicant claimed eligibility to ITC on the GST paid on canteen services in terms of proviso to section 17(5)(b) of the CGST Act, 2017 wherein it was provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. 1. Whether GST is liable to be discharged on the recoveries being made by the applicant from its employees towards the canteen and transportation facilities provided to them? 2. Whether the applicant is eligible to avail input tax credit in respect of the GST paid on inward supplies used for providing canteen and transportation facilities? 3. Whether GST is liable to be discharged on the recoveries being made by the applicant from its employees towards the transportation facilities provided to them? 4. Whether the applicant is eligible to avail input tax credit in respect of the GST paid on inward supplies used for providing transportation facilities? RULING : 1. The perquisites provided by the employer, canteen services in the present case, to their employees in terms of the contractual agreement between the employer and his employees as submitted by them, are in lieu of the services provided by them to their employees in relation to employment. Therefore the perquisites provided by the employer to the employee, in terms of contractual agreement, will not be subjected to GST. However if the employer makes taxable supply of canteen services to employees by charging consideration for the purpose of business, instead of providing them as a perquisite, the same will be subject to payment of GST, at prescribed rates, as per provisions of CGST/TGST Act’2017. 2. As per Section 17(5)(b) of CGST/TGST Act’2017 input tax credit in respect of such canteen facilities shall be available, where it is obligatory for an employer to provide the same to its employees under Factories Act, 1948. 3. The transportation services, if provided as a perquisite by the employer to the employee, in terms of contractual agreement between the employer and employee, will not be subjected to GST. However if the employer makes taxable supply of transportation services to employees by charging consideration for the purpose of business, instead of providing them as a perquisite, the same will be subject to payment of GST, at prescribed rates, as per provisions of CGST/TGST Act’2017. 4. Provision of service of transportation of employees from residence to office premises is for personal consumption or comfort of employees but not an activity which is part of business as the business of the applicant is to manufacture & supply of pre-engineered buildings and storage racking systems but not supply of transportation of employees or passengers. Input tax credit shall not be available in respect of goods or services or both used for personal consumption as per Section 17(5)(g) of CGST/TGST Act’ 2017. Kirby Building Systems & Structures India (P) Ltd., In re (2023) 114 ITPJ (SG) 488 (AAR)