2023 (6) TMI 578 - HC - GST

Movement of demo vehicle without Form-A GST and EWB-01 under Rule 138(1)(ii) attracts GST liability

The HC held that the movement of a demo vehicle into Madhya Pradesh without furnishing mandatory information under Rule 138(1)(ii) of the GST Rules ... Movement of goods for reasons other than supply - Exigibility of GST on goods in transit - Requirement to furnish pre movement information / e way bill under Rule 138(1)(ii) - Detention, seizure and release of goods under Section 129 - Non furnishing of prescribed information renders goods exigible to taxMovement of goods for reasons other than supply - Requirement to furnish pre movement information / e way bill under Rule 138(1)(ii) - Non furnishing of prescribed information renders goods exigible to tax - Whether movement of a demo vehicle into the State for reasons other than supply is exigible to GST where the supplier did not furnish the information required by Rule 138(1)(ii). - HELD THAT: - The Court examined Rule 138(1)(ii) which obliges a registered person causing movement of goods of consignment value exceeding Rs.50,000, even for reasons other than supply, to furnish information electronically in Form GST EWB 01 before commencement of movement. It was not disputed that the petitioner did not furnish the mandatory information under Rule 138(1). Applying the statutory scheme, the Court held that absence of the prescribed pre movement information brings the movement within the exigibility framework and, accordingly, the demo vehicle's entry into Madhya Pradesh rendered it exigible to GST. The Court found no jurisdictional error in the appellate authority's application of Section 129 and Rule 138 in arriving at the tax and penalty determination and in setting aside the cess and corresponding penalty as recorded in the impugned order.Movement of the demo vehicle without furnishing the information mandated by Rule 138(1)(ii) rendered it exigible to GST; the appellate authority's order sustaining tax/penalty in that view was upheld.Final Conclusion: Writ petition dismissed; no fault found in the appellate authority's order dated 23.12.2019 upholding exigibility of GST for the demo vehicle entry into Madhya Pradesh for non supply movement without the mandated pre movement information. Issues involved: Challenge to order reducing tax and penalty, applicability of GST on demo vehicle transported in Madhya Pradesh.Summary:The petition filed under Article 226 challenges the order reducing tax and penalty on a demo vehicle transported in Madhya Pradesh. The petitioner argues that the vehicle was not for sale, thus not liable to GST. The petitioner relies on the definition of 'supply' under Section 7 of the GST Act and CBDT circulars. The respondent argues that under Section 129 of the GST Act, goods exceeding Rs.50,000 in value are liable to GST even if not a supply.Section 129 of GST Act allows detention and seizure of goods in transit for contravention of rules, with penalties specified. Rule 138 mandates information prior to movement of goods exceeding Rs.50,000. The petitioner did not provide this information, making the demo vehicle liable to GST in Madhya Pradesh.The Court upholds the appellate authority's order, finding no fault or jurisdictional error. The writ petition is dismissed.