Case Details: Maheshwari Logistics Ltd. v. State of Gujarat - [2024] 168 taxmann.com 384 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & D.N. Ray, JJ.
• Anandodaya S. Mishra & Ms Himanshi Patwa, Advs., for the Petitioner.
• Ms Shrunjal Shah, AGP for the Respondent.

Facts of the Case

The petitioner was engaged in the business of providing logistics services, supplying of non-coking coal and manufacturing of kraft paper and trading in variety of papers. The department issued show cause notice (SCN) in FORM GST DRC-01 and Form DRC-01A in which demand was made for availing ITC from fictitious firm.

The petitioner filed reply but the department issued order without giving any opportunity of hearing to the petitioner as per Section 75(4) of the CGST Act, 2017.The petitioner challenged the SCN and order on the ground that the impugned show cause notices were in nature of final order and the order was passed without giving an opportunity of hearing.

High Court Held

The Honorable High Court noted that in the instant case, the department had issued SCN worded as final orders without proper opportunity of hearing which cannot be sustained. The Court also noted that the impugned SCN were issued by the department in form of order-in-original which couldn’t be sustained in the eye of law. Therefore, the Court held that the impugned SCN and subsequent order were liable to be quashed and the matter was remanded for fresh proceedings.

The post Matter to Be Remanded Since SCN Was Worded as a Final Order and Hearing Opportunity Was Not Provided | HC appeared first on Taxmann Blog.

Case Details: Radhey Traders v. State of UP - [2024] 168 taxmann.com 272 (Allahabad)

Judiciary and Counsel Details

• Arun Bhansali, CJ. & Vikas Budhwar, J.
• Aditya Pandey for the Petitioner.

Facts of the Case

In the present case, the petitioner had filed writ petition earlier against the demand order and contended that order was passed without service of order passed under Section 74 of CGST Act. The Court had granted specific relief by extending time to file appeal. However, the petitioner did not avail the said remedy and after over six months, filed instant petition.

High Court Held

The Honorable High Court noted that once a co-ordinate Bench by its order specifically allowed the petitioner to avail its remedy of appeal and even extended the period of limitation from the date of passing of the order, non-filing of the appeal and filing of the instant petition, on the ground sought to be raised cannot be countenanced. Therefore, the Court dismissed the petition.

The post Writ Dismissed as Assessee Failed to Appeal Against Order Within the Time Period as Directed by the Coordinate Bench | HC appeared first on Taxmann Blog.

Case Details: NRC. Spin Tex v. Assistant Commissioner (ST) - [2024] 168 taxmann.com 315 (Madras)

Judiciary and Counsel Details

• Krishnan Ramasamy, J.
• Vignesh Kumar K. for the Petitioner.
• V. Prashanth Kiran, Govt. Adv. for the Respondent.

Facts of the Case

The petitioner was a company engaged in the business of spinning of textiles. The department issued a show cause notice (SCN) and passed an order without providing any opportunity of personal hearing to the petitioner. The petitioner filed appeal against the said order with a delay of 54 days but the said appeal was rejected by the department on the aspect of limitation. It filed writ petition to challenge the order.

High Court Held

The Honorable High Court noted that the petitioner was unaware of the impugned order and it had failed to file appeal within the prescribed time. However, the reasons assigned by the petitioner for non-filing of appeal within the prescribed time appeared to be genuine. Therefore, the Court was inclined to condone the delay in filing the appeal. The Court also directed the Appellate Authority to take the appeal on record and pass appropriate orders on merits and in accordance with law, after providing sufficient opportunity to the petitioner.

The post Delay in Filing the Appeal Condoned as the Petitioner Was Unaware of the Impugned Order | HC appeared first on Taxmann Blog.

Case Details: SBI General Insurance Company Ltd. v. Union of India - [2024] 168 taxmann.com 278 (Bombay)

Judiciary and Counsel Details

• M.S. Sonak & Jitendra Jain, JJ.
• Prasad Paranjape & Lumiere Law Partner, for the Petitioner. 
• Ms Jaymala Ostwal & Sangeeta Yadav, for the Respondent.

Facts of the Case

In the present case, the petitioner challenged the Order-in-Appeal by which petitioner’s appeal before the Commissioner (Appeals) was dismissed on the ground that the authorised signatory of the petitioner did not sign the same. The Commissioner (Appeals) reasoned that since no proof, such as a board resolution, was produced, it could not accept the appeal instituted by the authorised signatory.

High Court Held

The Honorable High Court noted that the proper material had been produced to show that the signatory on the appeal memo was indeed authorised to sign the same. The Court also noted that the Appellate Authorities adopted such shortcuts and dismissing appeals, even without allowing appellants to either establish that the signatory was authorised to sign appeal memo or to place on record resolutions authorising such signatory with necessary powers, which violates principles of natural justice. Therefore, it was held that the impugned order was liable to be set aside.

List of Cases Reviewed

• Reliance General Insurance Company Ltd. v. Union of India [2024] 167 taxmann.com 408 (Bombay), followed.

The post Appeal Cannot Be Dismissed as Assessee Was Not Allowed to Establish That Signatory Was Authorized to Sign the Appeal Memo | HC appeared first on Taxmann Blog.

Case Details: Jain Cement Udyog v. Sales Tax Officer Class-II/ Avato Ward 201 Zone 11 Delhi - [2024] 168 taxmann.com 245 (Delhi)

Judiciary and Counsel Details

• Yashwant Varma & Ravinder Dudeja, JJ.
• R.P. Singh, Anant Vijay & Yash Agarwal, Advs., for the Petitioner. 
• Udit Malik, ASC & Vishal Chanda, Adv. for the Respondent.

Facts of the Case

The assessee was served with show cause notice (SCN) on 30-12-2020 and those proceedings ultimately culminated in passing of final order dated 01-02-2021. However, the impugned order was passed again on 23-04-2024 which pertained to same tax period. The assessee filed writ petition and challenged validity of impugned order by submitting that order was passed for same period.

High Court Held

The Honorable High Court noted that the order of 23-04-2024 undoubtedly pertained to same tax period in respect of which a final order came to be passed on 01-02-2021. The Court also noted that the assessee has already preferred an appeal against the order dated 01-02-2021. Therefore, it was held that the impugned order would not sustain and liable to be quashed.

The post HC Set Aside Order as It Was Passed for the Same Tax Period for Which an Order Had Already Been Passed appeared first on Taxmann Blog.

Case Details: Manoj Kumar Jain v. Union of India - [2024] 168 taxmann.com 253 (Rajasthan)

Judiciary and Counsel Details

• Ganesh Ram Meena, J.
• Brahmanand Sandhu, Parth Sarthi Sandhu & Akash Mathurm for the Petitioner.
• Ajatshatru Mina, Learned. Special Public Prosecutor for the Respondent.

Facts of the Case

In the present case, the accused was arrested for issuing fake invoices in names of nine fake firms which led to evasion of GST by claims of input tax credit on basis of such fakes invoices. He filed bail application and contended that the actual culprit in this case has been saved by the department and he has been falsely implicated in this case.

The department submitted that the accused was receiving 1% of taxable value of alleged fake bills for creating such fake invoices and 2% of taxable value of such fake bills was received by other person. The investigation as regards said other person was still not concluded and no complaint had been filed against him so far

High Court Held

The Honorable High Court noted that the department had not come out with a fact that these firms were not in existence after making a proper verification and also they had not come out with a fact that GST registration of these firms had been cancelled. Moreover, the maximum punishment for offences alleged against accused was five years and he had already suffered custody of more than seven months. Thus, it was held that the accused was to be released on bail.

The post Bail Granted to Accused as Dept. Failed to Prove That Alleged Fake Firms Didn’t Exist or Their Registration Cancelled | HC appeared first on Taxmann Blog.

Cross-border Digital Services Taxation refers to the application of tax laws on digital services provided by businesses across international borders. It includes services such as online advertising, streaming, cloud computing, and e-books. Jurisdictions like Egypt and India impose taxes like VAT (Value Added Tax) or GST (Goods and Services Tax) on these services to ensure tax compliance, whether the service provider is resident or non-resident. Taxation mechanisms include Reverse Charge Mechanism (RCM) for B2B transactions and simplified vendor registration for B2C transactions, with specific rates, exemptions, and compliance obligations varying by country.

Table of Contents

1. Indirect Taxation Landscape
2. Digital Services – Overview and Coverage
3. Taxability of Cross-border Digital Services
4. Rate of Tax and Place of Supply
5. Registration and Periodical Compliances
6. Penal Consequences

By Khaled Mandor – VAT Expert & Member of E-Commerce Unit, Sara Abdelfattah – Tax Officer and Coordinator & Member of E-Commerce Unit | Egyptian Tax Authority & Kishore Harjani – Leader | Taxmann’s Advisory and Research

1. Indirect Taxation Landscape

1.1 Overview of Indirect Taxation Landscape – VAT in Egypt

1.1.1. Levy

• Standard goods and services (VAT)
• Table goods and services (table tax then VAT or table tax only).
• Exempted Goods and services (57).
• Imported goods (custom tax +VAT).
• Imported services ( VAT or RCM).

1.1.2 Rates

• 0%
• 5%
• 8%
• 10%
• 14% 15% & 30%
• Excise tax

1.1.3 VAT on B2C and B2B

• Exclusions – Salaries, public governmental services, Financing loans Intra combination group, stock and derivatives Exchange.
• Exemptions – 57 goods and services, fresh Food, milk products, Tea, sugar, coffee bean, education, health and medicine, financial services*, Insurance, mining products, flights and overseas ships services.

1.1.4 Time of supply

• Goods – Earlier of date of “risk transfer”, removal, invoice, payment on advance
• Services – Earlier of date of invoice or payment on advance* except 4 continuing services. ** professional fee

1.1.5 Place of Supply & Threshold

• The place of jurisdiction include any local or Imported transaction to a benefit of a local customer.
• Thresholds;
• Stamdard goods and services 500k EGP.
• Table goods and services 0 EGP.

1.1.6 Credit

• The credit is always applied to inputs at a standard rate in the ordinary course of business, so any direct and indirect expenses associated with sales subject to the standard rate are tax deductible*

1.2 Overview of Indirect Taxation Landscape – GST in India

1.2.1 Levy

• Dual GST regime
• CGST+SGST on intra-state supplies
• IGST on inter-state supplies (including import of goods)

1.2.2 Rates

• 0%
• 5%
• 12%
• 18%
• 28%
• Cess as applicable

1.2.3 Exclusions

• Basic Customs Duty and Customs Cess
• Petroleum products,
• Alcohol,
• Power
• Stamp Duty

1.2.4 Time of Supply

• Goods–Earlier of date of removal/ invoice/ payment
• Services–Earlier of date of invoice or payment

1.2.5 Place of Supply

• PoS Rules to determine levy/jurisdiction for goods and services

1.2.6 Credits

• Credit for all expenses in course or furtherance of business

2. Digital Services – Overview and Coverage

2.1 Overview of Cross-border Digital Services – VAT in Egypt

2.1.1  Scope of Main Digital Services

• Streaming services
• Software and online licenses,
• Website design and tools.
• Legal, accounting, Consultancy and Professional services.

2.1.2 Place of Services

• Egyptian Taxpayer, Business, NPO, Government body.
• Pemanent resident in Egypt.

2.1.3 VAT on B2C and B2B

• B2C > Simlified Vendor Registtaion “VAT Obligations”
• B2B > Revese Charge Mechanism “API”

2.1.4 Compliance and Obligations

• Registration, TRN, Invoicing EU, API Verification of local business
• TRN.
• Tax Period, Currency,
• Taxable amount at the VAT rate.

2.1.5 VAT Rate and VAT Refund

• Standard Rate14%
• Professional services 10%.
• Examption Servecies.
• A refund to recover input VAT they have incurred in Egypt

2.1.6 Penalties

• Ban access to Egyptian markets.
• A risk review.
• 1.5% additional tax on the taxpayer per month or part of a month

2.2 Digital Services – Egypt VAT perspective

• Non-resident Vendor
• Renders Digital services
• Recipient in Egypt
• VAT to be paid in Egypt

For the said services, a Recipient is considered to be in Egypt,.

• Non-registered person having permanent residence in Egypt
• Registered taxpayer in Egypt
• Governmental Body, Public or Economic Authority, other Authority or non-registered entity in Egypt

If recipient has multiple establishments Place of supply will not be in Egypt if the service is predominantly used by recipient’s permanent establishment in another Country.

2.3 Coverage of Digital Services – Egypt VAT Perspective

2.3.1 Remote Services

Where at the time of the performance of the service, there is no necessary connection between the physical location of the recipient and the place of physical performance

• Advertising on the internet
• Providing cloud services, Domain name, Email tools
• Provision of Content; e-books, music, images, videos.
• Software and other intangibles and other related services license and maintenance.
• Providing data or information: newspapers subscription, Forex tread, and the like.
• Online supplies of digital content (movies, television shows, and the like.
• Online gaming.

2.3.2 On-the-spot Services

Services that require customer’s physical presence in a specific location to receive are not remote services, even if they are booked online.

• Booking of hotel services
• Physiotherapy services
• Physical entry to entertainment or sporting events.
• Restaurant and catering services; and Passenger transportation services.

2.4 Digital Services – India GST Perspective

• Popularly known as Online Information and Database Access or Retrieval Services (‘OIDAR’)
• It refers to services:

1. 1. whose delivery is mediated by information technology
   2. over the internet or an electronic network and
   3. the nature of which renders their supply impossible to ensure in the absence of information technology

2.5 Coverage of OIDAR Services – India GST Perspective

• Advertisement on Internet
• Cloud services
• E-books, Movies, Music etc. through telecommunication network or internet
• Database access or Retrieval in electronic form through a computer network
• Online supplies of digital content
• Digital data storage
• Online gaming except online money gaming

3. Taxability of Cross-border Digital Services

3.1 Taxation of Cross-border Digital Services – Egypt VAT Perspective

3.2 Taxation of Cross-border Digital Services – India GST Perspective

Intermediary is not liable

• Invoice from intermediary separately identifies services by him and digital service provider
• Intermediary not responsible for collection or processing of payment
• Terms and conditions of supply are not determined by intermediary

4. Rate of Tax and Place of Supply

4.1 Rate Digital Services – Egypt VAT Perspective

4.1.1 Standard Rate of VAT 14%

Digital Services

• Digital Services are liable to VAT at a standard rate of 14%
• Advertising on the internet
• Providing cloud services, Domain name, Email tools
• Provision of Content; e-books, music, images, videos.
• Software and other intangibles and other related services license and maintenance.
• Providing data or information: newspapers subscription, Forex tread, and the like.
• Online supplies of digital content (movies, television shows, and the like.
• Online gaming.

4.1.2 Reduced Rate of VAT 10%

Professional Services

• Legal, Accounting, Consultancy, Professional Certificates services and Freelancers services are liable to VAT at a rate of 10%.

4.1.3 Exemption of VAT

Educational Services

• Training and Educational Services are exempted of VAT*.
• *Under certain conditions

4.2 Rate of Tax and Place of Supply of Digital Services – India GST Perspective

4.2.1 Place of Supply

• Place of supply of OIDAR services shall be the location of the recipient of service
• Person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non contradictory conditions are satisfied, namely:

1. 1. Location of address presented by the recipient through internet
   2. The credit card or debit card or any other card by which the recipient settles payment;
   3. The billing address of the recipient;
   4. The IP address of the device used by the recipient
   5. The bank of the recipient in which the account used for payment;
   6. The country code of the SIM card used by the recipient;
   7. The location of the fixed land line through which the service is received by the recipient

4.2.2 Rate of tax

OIDAR Services

• Liable to GST at a standard rate of 18%

5. Registration and Periodical Compliances

5.1 Registration and Periodical Compliances – Egypt VAT Perspective

Step 1 – Submitting application
Step 2 – Review of application by ETA
Step 3 – Entry into designated register
Step 4 – Assigning registration no.
Step 5 – Fails to apply for registration

If a person responsible to apply for registration fails to apply, they will be treated as registered under the simplified vendor registration regime – starting from the date their sale value reaches the registration threshold.

https://www.eta.gov.eg/sites/default/files/2023-06/e-commerce_user_guide.pdf

Invoicing Requirements (B2C)

• Invoice Reference: Invoice/receipt issuing date, Invoice/receipt number.
• Registrant data: The name and the tax registration number of registrant.
• Services Data: description of the service supplied, its amount, and the rate and the amount of VAT
• Additional data of advertising services: Name and ID of the consumer (EU).

Invoicing Requirements (B2B)

• Invoice Reference: Invoice/receipt issuing date, Invoice/receipt number.
• Registrant data: The name and the tax registration number of registrant.
• Customer data: The name of the resident taxpayer, tax registration number of the resident taxpayer (must me verified through API system).
• Services Data: description of the service supplied, amount (no VAT applying)*, the resident taxpayer must comply Reverse Charge Mechanism RCM.

API integration System

• The system of non-resident Registrant should integrate with the API system, allowing for the automated exchange of information between the non-resident Registrant and the ETA, enabling real-time verification of the tax registration number and UIN of resident taxpayer.

https://www.eta.gov.eg/sites/default/files/2023-06/20230619_ecommerce_tax_api_platform.pdf

Filing Simplified VAT Return

• VAT Return: within the end of the month following the expiration of the taxable period (monthly tax return).
• Required Data: Supplier’s or platform’s registration Name – Tax Identification Number, Tax Period – Currency, Taxable amount at the standard rate, Taxable amount at a reduced rate(s), if any, Tax amount payable.
• Payment: When submitting a simplified VAT return, you must include the bank transfer swift document in the attached icon, and the swift’s specific details are as follows:

1. 1. Beneficiary Bank Name: Central Bank of Egypt
   2. Beneficiary Cust Name: Ministry of Finance/Egyptian Tax Authority.
   3. SWIFT Code: CBEGEGCXXXX
   4. USD; IBAN Code: EG140001000100000004082189165
   5. Euro; IBAN Code: EG510001000100000004082189178
   6. GBP; IBAN Code: EG670001000100000004082189181

5.2 Registration and Periodical Compliances – India GST Perspective

Mandatory Registration

• Overseas supplier of Digital services liable to obtain GST registration
• Registration is mandatory irrespective of the Turnover
• Registration to be obtained within 30 days of becoming liable

Registration Process

• Single registration under Simplified Registration Scheme
• Form GST REG – 10
• Application to be filed online

Registration by Representative

• Overseas supplier of digital services can appoint a person in the taxable territory for the purpose of:

1. 1. Registration under GST
   2. Payment of taxes

Monthly Return

• Monthly return
• Form GSTR-5A
• Timeline: 20th of month succeeding the relevant calendar month

Annual Return

• Exemption from filing of Annual Return unlike a domestic supplier of service who needs to file Annual Return in GSTR-9
• Exemption from filing of Annual Reconciliation Statement unlike a domestic supplier of service who needs to file the reconciliation statement in form GSTR-9C

Invoicing Requirement

• Requirement to issue a Tax invoice
• Tax invoice to include name of Recipient State – This will be considered as official address of the recipient for determination of place of supply of service

6. Penal Consequences

6.1 Penal Consequences for Non-compliances – Egypt VAT Perspective

1. (Law no. 206 of 2020)
2. (Law no. 3 of 2022)

6.2 Penal Consequences for Non-compliances – India GST Perspective

6.2.1 Failure to File GSTR-5A (Monthly Return)

INR 200/- per day of default [i.e. INR 100/- each per day under CGST Act and SGST Act] subject to a maximum of INR 10000/- [i.e. INR 10000/- each under CGST and SGST Act]

6.2.2 Interest for Delay in Payment of Tax

18% P.A. for the period in default

6.2.3 Failure for Payment of Tax

Higher of the following:

INR 20000/- [i.e. INR 10000/- each under the CGST act and SGST act

OR

Amount equivalent to tax evaded

6.2.4 Failure to Obtain Registration

Higher of the following:

INR 20000/- [i.e. INR 10000/- each under the CGST act and SGST act

OR

Amount equivalent to tax evaded

The post Cross-Border Digital Services Taxation – Egypt VAT and India GST Overview appeared first on Taxmann Blog.

Notification No. 26/2024 dated November 18th, 2024

The CBIC has issued notification to extend the due date for furnishing the return in FORM GSTR-3B for the month of October, 2024 till 21st November, 2024 for the registered persons whose principal place of business is in the state of Maharashtra and Jharkhand.

Click Here To Read The Full Notification

The post CBIC Extends Due Date of Filing GSTR-3B for October 2024 Till 21st November, 2024 for Maharashtra and Jharkhand appeared first on Taxmann Blog.

Bhavik P. Chudasama – [2024] 168 taxmann.com 399 (Article)

1. Introduction

The Goods and Services Tax (GST) Act, 2017, provides certain provisions for taxpayers to seek relief from interest and penalty imposed on them. One such provision is Section 128A r.w.t Rule 164, which outlines the procedure and conditions for the closure of proceedings under Section 128A of the CGST Act, 2017, generally termed as “GST Amnesty Scheme“. This rule provides a much-needed respite to taxpayers who may have inadvertently defaulted on their tax obligations for the period 01st July 2017 to 31st March 2020.

2. Key Provisions of Rule 164

Rule 164 primarily deals with the waiver of interest and penalty as mentioned in Sec 128A which is recently introduced by Section 146 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024. Rule 164 which outlines the procedural aspect of the for seeking benefit from Sec 128A was notified vide Notification No. 20/2024 – Central Tax dated 08th October, 2024, which specifies the following key points:

3. Eligibility for Waiver of Interest or Penalty

• Notices or Statements mentioned in Sec 128A (1) (a): Taxpayers who have received a notice or statement under Section 73(1) CGST Act, 2017 for period 01st July 2017 to 31st March 2020, can apply for waiver of interest or penalty or both.
• Orders mentioned in Sec 128A (1) (b) and (c): Taxpayers who have received orders under Section 73(9) i.e. Order from Proper Officer or under Section 107(11) i.e. Order from Appellate Authority or under Section 108(1) i.e. Order from Revisional Authority of the CGST Act, 2017, for period 01st July 2017 to 31st March 2020, can apply for waiver.

4. Application Process

• Form GST SPL-01: This form is used to apply for waiver in respect of notices or statements under Sec 128A (1) (a) to be filed within 3 months from date of payment to be notified u/s 128A. Since the notified date of payment is 31st March 2025, technically date for filing application should be 30th June 2025
• Form GST SPL-02: This form is used to apply for waiver in respect of orders under Section 128A (1)(b) or (c) to be filed within 3 months from date of payment to be notified u/s 128A. Since the notified date of payment is 31st March 2025, technically date for filing application should be 30th June 2025.

There is only one exception in GST SPL-02 that for the Cases covered under first provision of Sec 128A(1), the time limit will be six months from the date of communication of such order

The post [Opinion] GST Amnesty Scheme 2024 | Section 128A of CGST Act, 2017 appeared first on Taxmann Blog.

Case Details: Multi Trading Agencies v. Union Territory of Jammu & Kashmir through Commissioner - [2024] 168 taxmann.com 266 (Jammu & Kashmir)

Judiciary and Counsel Details

• Rajesh Sekhri & Sanjeev Kumar, JJ.
• B. Tanveer Majid Jehangir, Adv. for the Petitioner.
• D.C. Raina, Adv. General & Syed Musaib, Dy. AG. for the Respondent.

Facts of the Case

The assessee was aggrieved by the assessment order and filed appeal against the said order. The Appellate Authority rejected appeal by stating that delay in submission of appeal. It filed writ petition before the High Court.

High Court Held

The Honorable High Court noted that the assessee failed to file appeal within prescribed period. It is settled law that under Section 107(4) of GST Act, 2017, Appellate Authority can condone delay only up to 30 days beyond initial 3 months limitation period. However, the assessee didn’t provide any exceptional circumstances for condonation of delay in filing appeal.

Therefore, it was held that the mere negligence or absence of reasonable cause cannot be ground for condonation by High Court. However, the Court directed the department to re-visit the order of assessment if the same is required in the light of the facts brought to the notice of the Assessing Authority.

The post Writ Dismissed by HC as Assessee Failed to Show Exceptional Circumstances Warranting Condonation of Delay in GST Appeal appeared first on Taxmann Blog.