2024 (5) TMI 715 - HC - GST

Seigniorage Payment Challenge: GST Reverse Charge Mechanism Suspended Pending Constitutional Review of Royalty Taxation

HC allowed challenge to GST intimation under reverse charge mechanism for seigniorage payment. Following precedent from prior Division Bench ruling, court ... Levy of GST under the reverse charge mechanism on the seigniorage paid by the petitioner to the Government - HELD THAT:- Reliance placed in TVL. A. VENKATACHALAM VERSUS THE ASSISTANT COMMISSIONER (ST) [2024 (2) TMI 488 - MADRAS HIGH COURT] where it was held that 'It is made clear that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench takes a decision.' This petition is liable to be disposed of on the same terms. Issues involved: Challenge to intimation issued u/s 74(5) of Tamil Nadu Goods and Services Tax Act, 2017 regarding imposition of GST under reverse charge mechanism on seigniorage paid to Government.Summary:The petitioner challenged the intimation issued u/s 74(5) of the Tamil Nadu Goods and Services Tax Act, 2017, regarding the imposition of GST under the reverse charge mechanism on seigniorage paid to the Government. The respondent, represented by Mr. V. Prasanth Kiran, Government Advocate, referred to a recent judgment of the Division Bench in A. Venkatachalam v. Assistant Commissioner, which provided specific directions. These directions included the submission of objections within four weeks, adjudication proceedings to be conducted after hearing the petitioners, keeping adjudication orders on hold until a decision by the Nine Judge Constitution Bench on the nature of royalty, and no recovery of GST on royalty until the Nine Judge Constitution Bench decision. The judgment allowed the writ petitioners to address grievances before the appropriate forum and act upon notifications and circulars based on the outcome of the case pending before the Nine Judge Constitution Bench. The petition was disposed of in line with the directions issued in the mentioned case, with no costs incurred, and the related W.M.P. was closed accordingly.