TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 1063
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....o the earlier, henceforth for the purposes of this Advance Ruling, the expression SGST Act' would mean CGST Act and MGST Act. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF FACTS The said firm M/s. Jalaram Feeds a registered Partnership firm having its registered office at K-31/2A, MIDC, Hingna Road, Nagpur-16, is into manufacturing of only Compound Animal Feed (HSN Code : 2309). The above product is exempted under the CGST Act, 2017. No other supply of any kind of Goods and Services is made by the firm which in anyways is chargeable to Tax under CGST Act, 2017. The Firm says that since it is into supply of only exempted goods, it is covered under section 23 of CGST Act, 2017 and is not liable to take registration under any of the provisions of the Act, since the firm is into the supply of Exempted goods, it requires services of Goods Transport Agency like any other business. As per the provisions of Act, 2017, a firm is liable to take registration as it is liable to pay GST under Reverse Charge. The firm is of the opinion that Sec 24 overrules sec 22 (Person Liable to register beyond a specific aggr....
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....ss of supplying goods or services or both that is not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; (b) An agriculturist, to the extent of supply of produce out of cultivation of land. (2) The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act. Section 24 of CGST Act - Compulsory registration in certain cases Section 24 of CGST Act, 2017 from bare act: Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this ACT, -- (i) persons making any inter-State taxable supply, (ii) casual taxable persons making taxable supply: (iii) persons who are required to pay tax under reverse charge; (iv) person who are required to pay tax under sub-section (5) of section 9; (v) non-resident taxable persons making taxable supply; (vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act; (vii) persons who make taxable supply of goods or services or both....
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.... taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess; Section 2(47) defines Exempt Supply as: - "exempt supply" means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; To sum-up now, it is a clear interpretation that if a person is in the business of supply of Exempt Goods irrespective of Turnover (INR 50 lakhs) exceeding the Limits specified in the section he is not liable to take registration because the turnover criteria is only applicable for taxable supply: Suppose for an instance, if the supplier in addition to the above supplies a Taxable Good or Service for say INR 10 Lakhs, he would be liable for registration as the Aggregate Turnover would exceed the specified limit. Which is no....
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....the recommendations of the Council. It is fairly common in tax laws to use the expression "Notwithstanding anything contained in this Act or other Acts" or "Subject to other provisions of this Act or Other Acts". Ordinarily, it is a legislative device to give such a clause an overriding effect over the law or provision that qualifies such clause, On the clear reading of section 24 it has been devised to override sec 22(1) as it starts with the expression Notwithstanding anything contained in sub-section (1) of section 22". Thus section 24 specifically overrides the provisions of Section 22(1). However section 24 does not mention anything about sec 23 as it is a specific section. Applying the interpretation rules of Law, it can be very well concluded that the legislation has chosen consciously section 24 to override the provisions of section 22(1) and has deliberately left-out section 23 from section 24 as sec. 23(Exempted Supplies) is a specific section. Let us understand the intention of the Legislature using the Example: As per this Section, if a person obtains a service of a GTA, or a Lawyer, or any goods or service with reverse charge liability, irrespective of the turn....
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....per the provisions of section 9(3) or CGST / SGST(UTGST) Act, 2017 / section 5(3) IGST Act, 2017, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Accordingly vide Notification No. 13/2017-CentraI Tax (Rate) dated 28.06.2017 services were specified on which tax shall be paid on reverse charge basis by the recipient of such services. Goods Transport Service is one among them. Section 22 of the CGST Act mandate every supplier liable to registered under Act is aggregate turnover of taxable supply or goods or services or both exceeds twenty Lakhs in a financial year. Section 23 exempt any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax of wholly exempt from tax under this Act of under the Integrated Goods and Services Tax Act And Section 24 says that Notwithstand....
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....harge have been exempted for taking registration. In that case if contention of the applicant is accepted then neither the supplier of GTA service nor recipient would pay service tax nor would government lose revenue. This will defeat the basic purpose of reverse charge mechanism. Thus the applicant shall be required to be registered as per Section 24 (iii) of CGST Act, 2017 ("Persons who are required to pay tax under reverse charge") 04. HEARING Preliminary hearing in the matter was held on 20.02.2019. Sh. Jinish Katariya, CA appeared and requested for admission of their application as per details therein. It was brought to his notice to pay balance fee of Rs. 5000. Jurisdictional Officer was not present for hearing. The application was admitted and called for final hearing on 12.03.2019. Sh. Jinish Katariya, CA and Ms. Ruby Malviya appeared and made oral and written submissions along with payment challan of Rs. 5000/-. Jurisdictional Officer Ms. Sonal Jawanjal Asstt. Commr. Of CGST Division Hingna, Nagpur-l, Commissionerate appeared and made written submissions. We heard both the sides. 05. OBSERVATIONS AND FINDINGS: We have gone through the facts of the case and writt....
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....on, is not acceptable following reasons. Scheme GST being a tax on the event of 'supply' every supplier needs to get registered. However, as per the scheme of the Act, not every supplier is required to get registered. Only those suppliers, whose aggregate turnover of all supplies exceeds the threshold limit as prescribed under Section 22 (including exempted and taxable supplies). Thus to be registered a person satisfies two conditions namely, supply of taxable goods or services or both and aggregate turnover in a financial year exceeds threshold limit. The expression 'taxable supply' has been defined under the Act, as below: Section 2(108): "taxable supply" means a supply of goods or services or both which is leviable to tax under this Act; Thus a person who is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax is not liable for registration under Section 22 of the GST Act. Thus even without referring to section 23 of the Act, we can say that a person, whose aggregate turnover of all supplies is other than taxable supply, is not liable for registration. Section 23, provide exemption to certain catego....
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.... under the Act as below: Section 2(98): "reverse charge" means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act; Further, Government is vested with powers to specify by way of notification, categories of supply, the tax on which shall be paid on reverse charge basis by the recipient of such supplies. The relevant section of the GST Act are as below: Section 9(3): The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Section 9(4): The State Tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be ....
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.... the time being in force in any part of India; or (c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or (e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person; located in the taxable territory. From the above notification we find that Goods Transport Service is covered by the notification. Appellant has stated that they require services of Goods Transport Agency like any other business. Applicant being a recipient of supply is liable to pay tax under reverse charge basis and as per Section 9(4) of the Act, all the provisions of this act shall apply to such recipient (in this case, the applicant), as if they are the persons liable for paying the tax in relation to such supply. Thus from conjoint reading of Section 9 and section 24 of the Act, since the applicant is required to pay tax under reverse charge, they have to co....
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....rpretation of law by renowned jurists as stated in Eicher Tractors Ltd. vs Dy. CIT on 4 October, 2002: Equivalent citations: (2002) 77 TTJ Del 681 = 2002 (10) TMI 236 - ITAT DELHI-B as under: "It, would very apt at this stage to refer to certain observations/extracts from the 'Principles of Statutory Interpretation' by Justice G.P. Singh, Eighth Edm 2001, as follows : As stated earlier and as approved by the Supreme Court, 'the words of a statute, when there is doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strict grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained'. The courts have declined 'to he bound by the letter, when it frustrates the patent purposes of the statute'. In the words of Shah, J. : 'It is a recognized rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and....