Southern India Regional Council of
The Institute of Chartered Accountants Of India
(Setup by an Act of Parliament)


Professional Updates- December 2017


AP VAT / GST Update
CA Ambati Chinna Gangaiah, 08801032969


Gist of Judgments of Supreme Court
Sr. No Name of the Appellant Appeal No and date of decision Gist of Judgments / Orders passed
1 International Asset Reconstruction Company Of India Ltd Appeal Civil 16962/17 dt 24.10.17 The exclusion of any provision for extension of time by the Tribunal in preferring an appeal under Section 30 of the Act makes it manifest that the legislative intent for exclusion was express. The application of Section 5 of the Limitation Act by resort to Section 29(2) of the Limitation Act, 1963 therefore does not arise. The prescribed period of 30 days under Section 30(1) of the RDB Act for preferring an appeal against the order of the Recovery officer therefore cannot be condoned by application of Section 5 of the Limitation Act.
2 SRD NUTRIENTS AC 2781-2790/10 dt 10.11.17 23) It is also trite that when two views are possible, one which favours the assessees has to be adopted….. For the aforesaid reasons, we allow these appeals and hold that the appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy.
3 Indian Oil Corporation AC 3018 OF 2017 dt. 14.11.2017 Entry Tax would not be leviable on these transactions at all as the consumption, use or sale of petroleum products has taken place outside the local area of Patna (in AP and Telangana, entire State is considered to be Local area).
4 S.R.M.B. DAIRY FARMING AC 19650 of 2017 dt 23.11.17 We may also take note of the judgment of this Court in Suchitra Components Ltd. v. Commissioner of Central Excise, Guntur on the general principle of application of Circulars. Reliance was placed on the view expressed in Commissioner of Central Excise, Bangalore v. Mysore Electricals Industries Ltd opining that a beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively……….. the said view of the three Judges Bench would hold water and the Circular would apply even to pending matters

Gist of Judgments of High Court
1 M.S.R. Granites Metals TREVC NO.3 OF 2017 dt 28.2.17 ((65 APSTJ 1) There must be ‘any order passed’ or ‘proceedings recorded’ by the first appellate authority which enables the Tribunal to entertain an appeal filed before it on merits. If there was no appeal before the first appellate authority, there can be no second appeal before the Tribunal
2 K. Narender Reddy 65 APSTJ 21 If the applicant makes a false statement or suppresses any material fact or attempts to mislead the Court, the Court may dismiss the writ petition on that ground alone and may refuse to enter into the merits of the case. A prerogative remedy is not a matter of course. While exercising the extraordinary power, a Writ Court would certainly bear in mind the conduct of the party invokes the extraordinary jurisdiction of the Court
3 Venkateswara Traders WP 15888 and 44521/16 dt 7.2.17 (65 APSTJ 32) In order to attract penalty U/s. 53(3) of the APVAT Act, 2005, the dealer should be guilty of fraud or guilty of willful neglect. Where goods are stored in a State owned warehouse corporation and such stock is entered into in the registers of the said warehousing corporation and such stock is not properly reflected in the stock register of the dealer, it cannot be attributed that there is fraud or willful neglect on the part of the dealer warranting levy of penalty U/s. 53(3) of the Act.

Gist of Judgments of APVAT Appellate Tribunal
1 Sri Saptagiri Enterprises T.A.Nos. 372 & 373 OF 2011 dt 25.10.17 Harpic and Lizol are disinfectants and fall within the category of pesticides covered by Entry-20 of IV Schedule of AP VAT Act and they are exigible to tax @ 4%
2 Sencon System TA 188/16 dt 17.10.17 the appeal is allowed partly setting aside the order of ADC to the extent of denying the benefit of tax under the composition scheme applicable to the additional work.
3 V. Madhusudhan Reddy in TA No.88/08 dt 10th October, 2017 Revisional Authority failed to show that the assessment is irregular and detrimental to the revenue of the Govt. so as to interfere in the revision. As such the revisional order is liable to be set aside.
4 Madhu Granites TA 359/2009 dt 10.10.17 A plain reading of the above cited Rule indicates that it is no where mentioned that the dealer should file only original C-Forms and not the counterfoils…. the appeal can be allowed and the matter is remanded for accepting the counterfoil of ‘C’ Form
5 Delight Chemicals TA 32/08 dt 26.10.17 Revisional order of RA confirming the levy of tax under Section-5AA by setting aside both the orders of the ADC and original assessment orders of the AA is not sustainable, even though, the levy may be correct, but the authority to levy is either barred by limitation or suffers from lack of jurisdiction
6 Laxmi Cotton Enterprises TA 416/08 dt 31.10.17 Failed to establish the facts as to when the goods were landed, where the goods were from the date of purchase till the date of delivery to the purchaser, when the documents of title in the goods were transferred etc. Therefore, the dealer could not establish that the transaction is a transit sale amounting to first sale to claim exemption under Sec. 6(2) of the Act.
7 Sri Lakshmi General Trading Company TA 236/08 dt 31.10.17 RA in his orders, he has discussed about the merits of the case along with the lapses done by ADC in condoning the appeal inordinate delay without any specific reason. Hence, the orders of the RA are sustainable

GOs issued - GST
1 G.O.MS.No. 484 dt 31.10.2017 Amendments to certain rules
2 G.O.MS.No. 485 dt 31.10.2017 Changes to the list of persons exempted from obtaining registration under Section 23(2)
3 G.O.MS.No. 486 dt 31.10.2017 Cross empowerment for refunds under sections 54 and 55
4 G.O.MS.No. 487 dt 31.10.2017 Changes in the payment period for suppliers having rupees 1.5 Cr. and less turnover
5 G.O.MS.No. 488 dt 31.10.2017 Ninth amendment to APGST Rules
6 G.O.MS.No. 489 dt 31.10.2017 Increasing turnover limit for composition suppliers – from Rs.75 Lakh to One Crore
7 G.O.MS.No. 490 dt 3.11.2017 Changes in the list of persons liable to pay reverse charge tax
8 G.O.MS.No. 491 dt 3.11.2017 Certain changes to reverse charge tax on goods supplied by Central and State Governments
9 G.O.MS.No. 492 dt 3.11.2017 Certain changes to reverse charge tax on goods supplied by Central and State Governments
10 G.O.MS.No. 493 dt 3.11.2017 Changes to rates of tax applicable to motor vehicles
11 G.O.MS.No. 494 dt 3.11.2017 Reduction of Goods and Services Tax rate on Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government
12 G.O.MS.No. 495 dt 3.11.2017 Tenth amendment to APGST Rules
13 G.O.MS.No. 496 dt 3.11.2017 certain supplies as deemed exports under section 147 of the APGST Act, 2017 – (1) against Advance Authorization (2) registered person against Export Promotion Capital Goods Authorization (3) registered person to Export Oriented Unit & (4) Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorization
14 G.O.MS.No. 497 dt 3.11.2017 evidences required to be produced by the supplier of deemed export supplies for claiming refund under rule 89(20(g) of the APGST rules, 2017
15 G.O.MS.No. 551 dt 16.11.17 certain changes made by the Central Government before issuing Notification No.11/2017 Central Tax (Rate)- Not incorporated in the (Govt. of A.P.) notification issued in G.O.Ms.No.259, Revenue (CT-II) Dept., Dt.29-06-2017 - Corrigendum Orders
16 G.O.MS.No. 552 dt 16.11.17 Changes to rates of tax of certain services
17 G.O.MS.No. 553 dt 17.11.17 Changes to rates of tax of certain goods
18 G.O.MS.No. 554 dt 17.11.17 Payment of reverse charge on raw cotton
19 G.O.MS.No. 555 dt 17.11.17 No ITC refund for certain commodities - 5608 Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials, 5801 Corduroy fabrics & 5806 Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)”.
20 G.O.MS.No. 556 dt 17.11.17 Changes to rates of tax of certain Services
22 G.O.MS.No. 560 dt 24.11.17 Waiver of late fee payable under Section 47 of the APGST Act, 2017 for delayed filing of the return in FORM GSTR-3B for the months of August and September, 2017
23 G.O.MS.No. 561 dt 24.11.17 Seventh amendment to the APGST Rules, 2017
24 G.O.MS.No. 562 Special Procedure for filing outward supplies for suppliers whose aggregate turnover is up to 1.50 crore rupees in the preceding financial year or the current financial year dt 24.11.17
25 G.O.MS.No. 563 Seeks to extend the time limit for filing of Form GSTR-4 till 24-12-2017 dt 24.11.17
26 G.O.MS.No. 564 dt 24.11.17 Seeks to extend the due date for submission of details in Form GST-ITC-04 till 31.12.2017
27 G.O.MS.No. 565 dt 24.11.17 Waiver of the amount of late fee payable by any registered person for failure to furnish the return in FORM GSTR-3B for the month of October, 2017 onwards by the due date under section 47 of the said Act
28 G.O.MS.No. 566 dt 24.11.17 Exempting from obtaining Registration, persons making supplies of services, other than supplies specified under sub-section (5) of section 9 of the said Act through an electronic commerce operator who is required to collect tax at source under section 52 of the said Act, and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year
29 G.O.MS.No. 567 dt 24.11.17 Notifying the registered person who did not opt for the composition levy under section 10 of the said Act as the class of persons who shall pay the state tax on the outward supply of goods at the time of supply as specified in clause (a) of sub-section (2) of section 12 of the said Act

Advance Ruling
1 M S R Silver Palace A.R.Com/27/2016 dt 17.10.17 (AO 132 /17) If the dealer is required to transport the silver/silver articles on its own, either to the places of inside the State of A.P. or outside the State of A.P., it is governed by the provisions of APGST Act, 2017 and IGST Act, 2017, respectively, currently from 01-07-2017.

Additional Commissioner orders
1 Lanco Industries CCT’s Ref. No. LII(2)/134/2015 dt 24-10-2017 (ACO 309/17) Hon’ble High Court of Judicature of A.P. at Hyderabad, following the decision of Hon’ble Supreme Court of India in the case of Hazi Ali Mohamad Biri Works Vs State of U.P. 32 STC 496 SC, held in the case of Ramu and Co., Vs State of A.P. 43 STC 510 APHC that the payment of interest cannot be equated or mixed up with levy of penalty; that the liability to pay interest is automatic and arises by operation of law; and that the period of stay cannot be excluded for the purpose of collecting interest.
2 APSRTC CCT’S Ref. No .LII(1)/145/2017 dt 26-10-17 (ACO 313/17) The goods are sold by the dealer in numbers not in tones/quintols. Iron and steel scrap is sold always in quintols/tones, etc., on weight basis. Not in numbers. Thus, seeing the issue from any angle, not even a prima facie case is made out by the dealers.
3 Ultra Tech Cement CCT’s Ref. No. LII(2)/163/2015 dt 16-11-17 (ACO 338/17 dealer failed to file the valid declarations with true facts which are dependable, genuine and correct within the meaning of Section 6(A) of the Act. In the light of all the above, all the proposals made against the dealer are confirmed in toto. (the order against SC judgment in Harbanslal Malhotra & Sons Pvt.Ltd. in Civil Appeals No. 3337/2007 dt 5.9.17 “…….. 24 It is a settled rule of interpretation in relation to taxing laws that a machinery provision which enables the assessee to avail of a concession or benefit conferred by substantive provision in the Act, such provisions are required to be construed liberally. (See G.P Singh -Principles of Interpretation of Statutory Interpretation 13th Edition page 856). This rule applies to the case on hand and hence, benefit of the interpretation must go to the assessee rather than to the taxing man……….”) (Appeal may be filed before Tribunal U/s 18A of CST Act with stay petition – further appeal (if required lies to CST Appellate Authority making other States as parties with stay petition)

ADC (presently Appellate Joint Commissioner) Orders
Sr. No Name of the Appellant Appeal No and date of decision Gist of Orders passed
1 Ismail Timber Depot Appeal No. 56/2016-17(ATP) dt 23.10.17 (ADC 2384/17) The assessing authority ought to have verified the books of accounts, purchase bills and sales statement with reference to VAT 200 returns for the audit period from June, 2014 to January, 2015 and passed orders accordingly.
2 Sri Lalitha Cotton Ginning Co 103/2015-16(KNL) dt 23.10.17 (ADC 2387/17) ”there is no evidence to show that the appellants have escaped the turnover either in the books of accounts or in I.T. statements during the period of assessment. Therefore, on this ground alone the appeal is liable to be set aside….”
3 Tulasi Mirchi Traders 141-142/2015-16(GNT) dt 24.10.17 (ADC 2388/17) the shortage accounted by the appellant is very much reasonable and genuine. There is no question either through show-cause notice or by way of argument in assessment order regarding the reasonableness or other wise of the shortage accounted. The shortage of weighment is an inherent nature of any agri-based commodity and is in existence since the beginning.
4 Doosan Infra Core 170 & 192/2016-17(CTR) dt 23.10.17 (ADC 2408/17) there is no evidence or record to show that the goods under transit is meant for sale between the appellants and M/s. Pallava Red Granites Pvt. Ltd., Chimakurthy…………. transaction covered under the documents is not a sale in view of the facts and circumstances as proved by the appellants. With these observations and the material available on record, the appeal is liable to be set aside and allowed.
5 Empereal KDGS Renewable Energy 166-167/2016-17(CTR) dt 23.10.17 (ADC 2409/17) there is no willful or fraudulent motive on the part of the appellants in transporting the goods from Coimbatore to Visakhapatnam in A.P. which was duly covered with proper documents described above and there is no obligation on the part of the appellants to pay tax and penalty
6 Ratnagiri Trading Company VJA-II/46/2017-18 dt 20.11.17 (ADC 2442/17) It is also pertinent here, to record that though the audit officer has estimated stock difference, but has not anywhere established the resultant sales of such estimated stock difference. Many authorities held previously that levy of tax on mere assumption of stock difference cannot be held valid unless resultant sales are proved with corroborative evidence or leading to such circumstances of sale.
7 Dishnet Wireless VJA-II/37/2017-18 dt 201.11.17 (ADC 2444/17) arguments that the possessive control of any goods was not transferred, hence no transfer of right to use involved, is found to be factual and to be held as tenable
8 Bhushan Power & Steel) VSP/117/2016-17 dt 20.11.17 – (ADC 2446/17) It is evident from the assessment order that the AA has not caused any further enquiry to establish whether such stock difference has been resulted in sales suppression by the appellant or not? That means, the AA could have verified alternative evidences of bank statement, other end dealers (who regular purchases from the appellant, purchase records for evincing evidence to prove whether the appellant has suppressed any sales. Without such findings, action of the AA by levying tax on mere assumption of sales suppression lacks credibility & authenticity.

DC Orders Presently Joint Commissioner of State Taxes
1 Pyla Imports & Exports Rc. No. 406/ 2015, A9 dt 26.10.17 (DCO 1325/17) CST Act,1956 provided eligibility of exemption only to the last sale preceding to export to outside the territory of India. In the present case the buyer i.e. M/s. Chaitanya Industries did not export the goods to outside the territory of India. They have only sold the goods to an exporter and not to a foreign buyer outside the territory of India and did not receive any amount from the foreign buyer.
2 Sri Santhoshimatha Constructions RV No.7/2017-18/NRP dt 8.11.17 (DC 1363/17) sale was occurred after completion of construction and hence there is no liability of tax on the sold property

Professional Updates- November 2017


VAT / GST Update in AP

CA Ambati Chinna Gangaiah, 08801032969

Supreme Court

  • 1. Ahluwalia Contracts – AC 15605-06/17 dt 4.10.17 - The power of the High Court under Article 226 of the Constitution, wide and pervasive as it is, should have enabled the High Court to appropriately deal with the situation and issue consequential directions permitting initiation of fresh proceedings, if the Revenue was so inclined.
  • 2. Karnataka Soaps & Detergents AC 4822-4825/15 dt 12.10.17-In this process of manufacturing the perfumery compounds are capable of being sold in the open market. The odoriferous compound has got a shelf life and capable of being stored/transported/sold and bought by agarbathi industries. As noticed above, the assessee had sold certain quantity of perfumery compound to M/s. Tibetan Handicrafts Centre Bylkuppe, Mysore District. Therefore, we are of the view that it is an excisable product falling under Chapter Sub-Heading 3302.90

GOs issued U/ GST
  • 1. G.O.MS.No. 446 Dated: 03-10-2017 - In exercise of the powers vested under Section 68 of the Andhra Pradesh Goods and Services Tax Act, 2017 read with Rule 138 of the Andhra Pradesh Goods and Service Tax Rules, 2017, the Government of Andhra Pradesh hereby extends the time limit of operation of the notification issued vide G.O.Ms.No.309, Revenue (Commercial Taxes-II) Department dated 24th July, 2017 till 31-12-2017 or till the eway bill system is developed and approved by the Council, whichever is earlier.
  • 2. G.O.MS.No. 456 dt 16-10-17 - In exercise of the powers conferred by section 128 of the Andhra Pradesh Goods and Services Tax Act, 2017 (Act No.16 of 2017), the Government, on the recommendations of the Goods and Services Tax Council, hereby waives the late fee payable under section 47 of the said Act, for all registered persons who failed to furnish the return in Form GSTR -3B for the month of July, 2017 by the due date.
  • 3. G.O.MS.No. 457 dt 16-10-17 - Appointing 18th September, 2017 as the date on which the TDS provisions under sub-section (1) of Section 51 of the Act (a) an authority or a board or any other body, - (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with fifty-one percent or more participation by way of equity or control, to carry out any function; (b) society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); (c) public sector undertakings: Provided that the said persons shall be liable to deduct tax from the payment made or credited to the supplier of taxable goods or services or both with effect from a date to be notified subsequently, on the recommendations of the Council, by the Government.
  • 4. G.O.MS.No. 459 dt 16-10-17 Amendments to certain rules- Notification- Orders
  • 5. G.O.MS.No. 460 dt 16-10-17 Reduction of rate of tax on services provided to the Central Government, State Government, Union Territory, etc
  • 6. G.O.MS.No. 461 dt 16-10-17 Change in rates of tax of certain goods like dried tamarind, roasted gram
  • 7. G.O.MS.No. 462 dt 16-10-17 Amendment list of goods where excess ITC cannot be refunded; i.e., notifying that Excess ITC is not refundable for Corduroy Fabrics

Notification issued U/ GST

Government vide Notification 38/2017, Dt: 13-10-2017 has postponed the applicability of reverse charge on inward supplies from unregistered under Section 9(4) of CGST Act from 13-10-2017 till 31-03-2018, it is applicable to all the taxable persons.

Advance Rulings - VAT

1. Vassar Labs IT Solutions - A.R.Com/439/2016 dt 26.9.17 (AO 127/17) – (a) The transactions covered under this document are constituting work contract within the meaning of section2 (45) of the APVAT Act, 2005 and hence, it is liable for registration under Section 17 of APVAT Act, 2005 and it is liable to pay tax as under. If it has opted to pay the tax liabilities under composition scheme, the applicant will be liable to pay tax @ 5% on the entire work contract consideration agreed to be paid. (b) If it does not opt to come under the composition scheme, it is liable to pay tax @14.5% on 70% of the total consideration agreed to be paid by the contractee to the contractor-applicant. (c) However, if the applicant – dealer establishes the various components of labour and services charges for the execution of the works, charges for planning design and architect fees, cost of establishment, cost of consumable goods, profit earned by the contractor to the extent it is relatable to supply of labour and service, etc, it can pay for only on the material component which is to be arrived at under Rule 17 of the APVAT Rules, 2005 at the rates (Schedule rates mentioned in Schedules I,II,III,IV, V& VI of the APVAT Act, 2005) that are applicable to the goods which are transferred from the applicant-contractor to the contractee.

2. Divyabhirami Agro Sales - A.R.Com/271/2016 dt 26.9.17 (AO 128/17) - The revisionist-applicant could not establish that we have committed any mistake which is apparent from the record. Nor there is any change in the law or facts on the basis of which the clarification or ruling given earlier is to be reviewed / rectified. In the light of the above, we are of the view that it is not a fit case for either review or rectification.

3. Gayatari Enterprises A.R.Com/267/2016 dt 26.9.17 (AO 129/17) - This issue is fairly covered by the clarification already issued by this Authority in CCT’s. Ref.No.AR.Com/39/2006, dt 01.11.2006, in the case of M/s Salvo Explosives and Chemicals (P) Ltd, Nalgonda District and hence, this application, is not maintainable before this Authority – The ruling as follows: The eligibility of input tax credit with respect to the detonating fuse, detonators, card relays etc. used in the execution of any work depends upon whether the output is liable to tax or not. The applicant cannot say on one hand that he can claim input tax credit but he is not 3. liable to output tax. If the value of the goods used in the execution of work is eligible to tax, the benefit of input tax credit is also available under the provisions of Section 13 of AP.VAT Act read with Rule 20 of AP.VAT Rules, 2005.

4. Merino Industries A.R.Com/424/2016 dt 11.10.17 (AO 130/17) - it is hereby clarified that acrylic solid surface sheet is taxable @ 14.5% under schedule VI to the Act in advance ruling in A.R.Com/55/2013 (CTD Order No.1, dated 06-01-2014)

ADC (presently Appellate Joint Commissioner) Orders

1. Sri Lakshmi Balaji Stone Crushers - APPEAL NO. 20- 25/2017-18 (NRP) dt 23-09-2017 - ADC ORDER NO.2269/2017 - In the process of manufacturing that is Crushing the boulders into chips will generate lot of wastage depends upon the quality of rocks. The appellants has not disputed the quantity of permits issued by the mining department but questioning the adaptation of average price of 40 mm and 20mm chips based on SSR rates ignoring the fact of wastage and the rates of 12 mm and 6mm chips. The Authorized Representative further contended that a factual enquiry by the assessing authority will certainly reveal the ground realities to assess their appellants’ liability of tax correctly. The Authorized Representative contended the assessing authority passed orders without making minimal enquiry.

2. Murali Krishna Agro Industries - Appeal No. VSP/42/2017-18 dt 27.09.2017 ADC 2291/17 - The appellant strongly professed that, at no point of time such wheat ravva was mixed with the other produced vermicelli and hence, such records cannot be rejected as untrue merely basing on some assumption and presumption. The appellants declared that they have maintained all such books of accounts, records, invoices and all corroborative and supporting documents including waybills that are prescribed under Rule 29 of AP VAT Rules and further that these records and books are substantial evidence to prove their contentions. Therefore, the appellants established that they have maintained separate records for dispatch of goods obtained from both outside the states and within the state purchases of wheat ravva and the specific inputs as stated supra

3. Megha Fruit Processing APPEAL No.29/2017-18(CTR) dt 25.10.17 (ADC Order No.2317/17) - When all the details what so ever required by the assessing authority are available in the statutory declaration form, rejecting the same without conducting enquiry is bad in law. The decision of the Supreme Court of India rendered in the case of Ashok Land Ltd Vs State of Tamilnadu (SC) reported in 134 STC page 473 is applicable.

4. Ganesh Traders - 36/2017-18 (NRP) (ADC ORDER NO.2320/17)dt 5.10.17 - As seen from the impugned re-assessment order it is noticed that the orders passed by the assessing authority without verifying the IT statements is not correct and valid and made it difficult to uphold the legality of the orders passed on this count. As seen from the assessment record, it is strikingly observed that there are no evidences of the material available de-hors the record to re-assess the appellant.

5. Sri Dhana Lakshmi Stone Crusher - 35/2017-18 (NRP) dt 5.10.17 (ADC ORDER NO.2319/17) - assessing authority at least would have obtained the information from other stone crushers about production of varieties of metal chips and should know the process from the boulders stage to the chips stage and confirm whether ant truth in the contentions of the appellants and pass orders accordingly. I therefore set aside such estimate and levy of tax and remand the matter to the assessing authority for computation of turnovers by conducting independent enquiry

6. Starrh Almond King 24/2017-18(GNT) dt 9.10.17 (ADC 2337/17) examine all the relevant documents in respect of sales returns that were happened within a period of 6 months from the date of invoice, under the provisions of Section 8A(1)(ii) of C.S.T.Act, 1956, with reference to stock register, movement of goods etc and pass appropriate order afresh under the provisions of CST Act, 1956

7. Chandrasekhar Naidu 108/2015-16(CTR) dt 3.10.17 (ADC 2344 /17)the appellants had transferred the right to use goods to the APSRTC as per the terms and conditions between the appellants and APSRTC (the appeal orders are against the spirit of HC judgment in Transocean Offshore Vrs Union India in WP 44908/16 dt 6-4-17)

8. Kone Elevator India Pvt. Ltd VJA-II/109/2016-17 dt 20.10.17 (AJC 2352/17) Since it is a works contract and the dealer is not able to ascertain expenditure portion between material and labour though maintaining books of accounts, same is 70% taxable and 30% exemption/ standard deduction will applied as per Rule 17 (1) (g) of AP VAT Rules is to be upheld as precise & accurate

DC Orders Presently Joint Commissioner of State Taxes

M.G. Brothers Spl.R.No.40/2014-15 dt 11.10.2017 (DCO 1316/17) - hiring of their vehicle to HPCL squarely fit within the ambit of Right to use Goods and liable to be taxed under the section 4 (8) (the revision orders are against the spirit of HC judgment in Transocean Offshore Vrs Union India in WP 44908/16 dt 6-4-17)

Professional Updates- September 2017


Andhra Pradesh VAT

CA Ambati Chinna Gangaiah, 08801032969

Supreme Court

  • 1. Rayalaseema Alkalies and Batch - Appeal Civil 8036-8060/17 – directed the respondents in the judgment on entry tax to file petitions in the concerned High Courts by 15th August, 2017 – HC decides as per the guidelines of Nine Members Bench Judgment.
  • 2. Hindustan Petroleum Corporation Appeal Civil 9295/17 dt 3.8.2017 (IT Matters) this Court in Commissioner of Income Tax, Madras v. Vinbros and Company where bottling and blending of alcohol is held to be ‘manufacture or production’ for the purpose of Section 80-IB
  • 3. Privacy is held to be fundamental right by 9 Members Constitution Bench over ruling 1976 Judgment.
  • 4. Indian Hume Pipe Co. Civil Appeal 9879/17 dt 28.8.17 - the agreement was clearly in two parts, namely, (i) sale and supply of PSC pipes, jointing material specials, valves, anchor blocks, etc. and (ii) the remaining part being supply of labour and services. These findings are upheld not only by the appellate authority but also by the Single Judge of the High Court as well as the Division Bench of the High Court. It may also be mentioned at this stage that the assessee has, in fact, admitted that it had no grievance against the finding that supply of pipes was nothing but the sale of pipes involved in the execution of the contracts and, therefore, it was excisable to sales tax.

PMs Independence Day Speech - GST rollout improves business efficiency by 30%: PM Narendra Modi
The abolition of inter-state check posts after the implementation of GST has reduced time for movement of goods by 30 per cent and saved thousands of crores of rupees.

GOs issued
  • 1. GO MS No. 309 dt 24.7.17 - e-Waybill is required for the movement of goods which are not exempted under the Act for all purposes i.e., coming into the State or going out of the State or for the movement within the State, when the value of goods excluding tax exceeds Fifty Thousand Rupees. However, the issue of an e-Waybill shall not be necessary where a person, who is not a taxpayer, transports his household goods or other articles for his own use from one place to another.
  • 2.GO MS No. 375 dt 18.8.17 - amendment for rule 34, the following shall be substituted, namely:- “34. Rate of exchange of currency, other than Indian rupees, for determination of value.- (1) The rate of exchange for determination of value of taxable goods shall be the applicable rate of exchange as notified by the Board under section 14 of the Customs Act, 1962 for the date of time of supply of such goods in terms of section 12 of the Act. (2) The rate of exchange for determination of value of taxable services shall be the applicable rate of exchange determined as per the generally accepted accounting principles for the date of time of supply of such services in terms of section 13 of the Act.”;

    in rule 44, with effect from 1st July, 2017, for sub-rules (2) and (3), the following shall be substituted, namely:- “(2) The amount, as specified in sub-rule (1) shall be determined separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. (3) Where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount under sub-rule (1) based on the prevailing market price of the goods on the effective date of the occurrence of any of the events specified in sub-section (4) of section 18 or, as the case may be, sub-section (5) of section 29.”; (iv) in rule 46, for the third proviso, the following proviso shall be substituted, namely:- “Provided also that in the case of the export of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may be, and shall, in lieu of the details specified in clause (e), contain the following details, namely,- (i) name and address of the recipient; (ii) address of delivery; and (iii) name of the country of destination:”;
  • 3. Amendments specified to items specified in G.O.Ms.No.259, Revenue (Commercial Taxes-II) Department, 29th June, 2017 by GO Ms No.382 to 386 dt 22.8.17

  • 1. Jami Santharao TA 99/11 dt 31-10-16 - Here bill of lading is filed showing the movement of goods in the course of export. Invoices have been filed proving the identity of the goods. The foreign buyer’s purchase orders numbers were quoted in the H form. Unless there is foreign buyer’s order, it may not be possible for the Indian Exporter to place order on the appellant for shipment of the goods. Apart from it the circular instructions issued by the Commissioner does not indicate that foreign buyer’s agreement has to be filed.
  • 2. Sai Industries TA 97/08 dt 28.8.17 - Since it is burden of the Revisional Authority to conclude that the commodity is not writing slates and cannot lay the burden on the dealer to show that the commodity is writing slates only and the impugned order does not reflect that it relied on any tenable evidence to come to its conclusion, the impugned order is not sustainable.

    in rule 44, with effect from 1st July, 2017, for sub-rules (2) and (3), the following shall be substituted, namely:- “(2) The amount, as specified in sub-rule (1) shall be determined separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. (3) Where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount under sub-rule (1) based on the prevailing market price of the goods on the effective date of the occurrence of any of the events specified in sub-section (4) of section 18 or, as the case may be, sub-section (5) of section 29.”; (iv) in rule 46, for the third proviso, the following proviso shall be substituted, namely:- “Provided also that in the case of the export of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may be, and shall, in lieu of the details specified in clause (e), contain the following details, namely,- (i) name and address of the recipient; (ii) address of delivery; and (iii) name of the country of destination:”;

  • Professional Updates- August 2017


    Andhra Pradesh VAT

    CA Ambati Chinna Gangaiah, 08801032969


    1. 1. West Godavari Co-Operative Sugars TA 458/09 dt 25.1.17 The successful purchaser in the present case is from outside the State of A.P. who participated in the auction with an intention to transport molasses to outside the State of A.P. The supporting documents produced i.e., the bills, way bills and C forms clearly shows that the sale effected by the appellants are inter-state sales.
    2. 2. Hirawat Fashion TA 481/11 dt 25.1.17 - artificial jewellery sold by the appellants clearly falls under Entry 146 of First Schedule liable to be taxed @ 1% and the revisional authority has erroneously levied the tax @ 12% treating them as unclassified goods
    3. 3. Balaji Spun Pipes - TA 408/08 dt 17.2.17 Though there is a delay of more than three months in the service of revision order, we are not going into the issue because the impugned order is found to be bad in law for the other reasons hereinabove mentioned
    4. 4. K.A.R. Cotton Traders TA 200/07 dt 22.2.17 - Levy of tax by making a vague allegation that the appellant purchased cotton kappas without any material on record would be bad in law. There is no discharge of burden by the DC.
    5. 5. Costal Communications TA 85/08 17.7.17 - recharge coupons and sim cards only enable the users to access the service providers and as such they are only a means of accessing of service provided and not goods separately sold and hence leviable to turnover tax under Section-5A of the Act on the turnover relating to the second sale of the recharge coupons and sim cards. Therefore, we hold that levying of turnover tax is not leviable on the second sales of sim cards and recharge coupons.

    Gujarat HC

    Titan Industries O/TAXAP/46/2017 dt 3.2.17 (101 VST 1) - The word “Article or Jewellery” used in Entry No.13(ii) of Schedule II of the Act is required to be given the widest meaning and is not required to be read in a narrow or restricted sense and the fullest meaning is required to be given to the words used in the Entry in the texting statute. In the case of The Elel Hotel and Investments Ltd. and Anr (Supra) the Hon’ble Supreme Court has observed that the cardinal rule of interpretation is that the entries in the legislative lists are not to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. It is further observed that the widest possible construction, according to the ordinary meaning of the words in the entry, must be put upon them

    Central Board of Direct Taxes

    Circular 23/17 dt 19.7.17- Modification of Circular No.1 of 2014 in view of substitution of Service Tax by Goods and Services Tax - 4. In the light of the fact that even under the new GST regime, the rationale of excluding the tax component from the purview of TDS remains valid, the Board hereby clarifies that wherever in terms of the agreement or contract between the payer and the payee, the component of'GST on services' comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVIJ-B of the Act on the amount paid or payable without including such (GST on services' component. GST for these purposes shall include Integrated Goods and Services Tax, Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax

    Professional Updates- July 2017

    VAT Update in AP

    CA Ambati Chinna Gangaiah, 08801032969

    Supreme Court
    Kathyayini Hotels 135 STC 77 - Even a best judgment assessment must be reasonably made and not on surmises

    Advance Ruling
    Shuchi Beverages-A.R.Com/376/2016 dt 24.5.17 (AO124/16)–Movement of goods outside AP– price ex factory – specified as sales liable for VAT – Appeal filed before APVAT AT VSKP – Arguable case exists

    Orissa HC
    D. K. Construction - STREV Nos.101 /11 and batch dt 1.3.17 - 100 VST 24 - Contract for supply of ballast and grit at both sides of Railway track – Labour charges to be deducted

    Bombay HC
    Axis Bank – WP 1796 OF 2015 dt 7.3.17 100 VST 48 - Recovery of tax-Priority of debts- Company in liquidation –Bank bringing property mortgaged to it to sale- Bank’s dues have priority over statutory dues - Maharashtra Value Added Tax , 2002 (9 of 2005), ss. 33(1), 37, 38 – Securitization and Reconstruction of Financial Assets and Enforcement of security Interest Act (54 of 2002), ss. 13, 26E, 35-Companies Act (1 of 1956), ss. 529, 529A, 530

    Chhattisgarh HC
    Kasturchand Bafna 100 VST 251 Breakup of landed cost per tone including freight by road on pre-paid door delivery basis – Freight charges included in “sale price” by express agreement between parties –Includible in taxable turnover –Reassessment –Question whether freight charges includible in turnover not considered in original assessment – Reopening of assessment valid

    Allahabad HC
    Silawar Brick Field 100 VST 394 Settlement scheme fixing trade tax payable on composition basis – Once agreement entered into, binding on both dealer and Department – Dealer not entitled to seek waiver of payment on any ground

    Professional Updates- June 2017

    VAT Update in AP

    CA Ambati Chinna Gangaiah, 08801032969

    Supreme Court

    • 1. Aryaverth Chawl Udyuog, Appeal Civil No. 6714/09 dt. 27.11.14 (91 VST 1)- assessment cannot be reassessed by placing reliance on the change in law specified in circular and action is taken on the basis of directions issued by Commissioner.
    • 2. CTO Vs A Infrastructure Ltd Appeal Civil 2806/15 dt 24.11.15 - There is no doubt that a distinction has to be drawn between exempted goods, which means complete exemption for the specified goods, and when the goods are taxable goods, but a transaction or a person is granted exemption. When the goods are exempt, there would be no taxable transactions or exemption to a taxable person. In other cases, goods might be taxable, but exemption could be given in respect of a taxable event, i.e., 8 (1976) 4 SCC 27 24 Page 25 exemption to specified transactions from liability of tax or exemption to a taxable person, though the goods are taxable. (Argument of profession - ITC can be claimed in respect of sale of taxable goods even if not taxed under specified circumstances)

    High Court
    Bhimas Hotels – WP 217/17 dt 23.3.17 - supply of food to its workers at a subsidized rate is understood to be part of their industrial obligation, it is unthinkable that the same can be construed as service falling within the definition of the expression ‘service’ under Section 65B(44) of the Finance Act. The 2nd respondent has completely overlooked this aspect and assumed a jurisdiction not vested in him in law. As a matter of fact, the petitioner has paid the value added tax on the value of the food supplied to its workers. In respect of some assessment years, they have even been imposed with a penalty under the Andhra Pradesh Value Added Tax Act, 2005. Therefore, once the State Authorities have treated the supply of food to the workers of the petitioner as sale, it is not open to the respondents to treat the same as service and impose a liability.

    Advance Ruling
    Foods Fats & Fertilisers-A.R.Com/08/2015 dt 28.4.17(A.O. 122/16)(majority decision) - Margarine is commercially a different product from vegetable oils mentioned in Entry 66 or 67 of schedule –IV and therefore, it falls under Schedule-V liable to tax @14.5%

    Commissioner’s Circulars
    CCT’s Ref.No.CCW /CS (1)/128/2015, dt.09.05.17- filing of Annexure III ( List of inventory )and Annexure IV ( Details of all bank accounts transacted during the tax period ) along with form VAT 200 for the quarter endings June, September, December and March

    Gujarat HC
    Shyam Industries Special Civil Application No 5204/16 dt 17.6.16 (100 VST 343) - Tribunal and High Court directing refund – Department seeking special leave to appeal to Supreme Court and Supreme Court issuing notice on petition and application for condonation of delay – Commercial Tax Officer cannot suo motu refuse to refund on ground Department in process of appealing to Supreme Court – However, refund to abide order of Supreme Court.

    Professional Updates- May 2017

    VAT Update in AP

    CA Ambati Chinna Gangaiah, 08801032969

    High Court

    • 1. Transocean Offshore – WP 44908/16 dt 6.4.17 “………..47. As pointed out by the Supreme Court in State of A.P. v. Rashtriya Ispat Nigam Ltd.1, hire charges are taxable only when full possession and control is given to the hirer. If the owner retains effective control over the equipment, it is not transfer of the right to use………”
    • 2. Tirupati Fuels wp 11082/17 dt 6.4.17 – “………..All that was required of the petitioner was to produce proof to show eligibility for input tax credit. If this proof had been produced there would have been no difficulty, in arriving at the final figure without disturbing the figures already recorded. Therefore, we are of the considered view that the petitioner deserves one opportunity only for the purpose of producing evidence……………”
    Commissioner’s Circulars
    • 1. CCT’s Ref.No.CCW /CS(1)/128/2015, dt.27.03.17 - instructions in modification of procedure for Post registration advisory visits
    • 2. CCT’s Ref.No.CCW /CS (1)/128/2015, dt.10.04.2017 - instructions issued and communicated for discontinued of using physical waybills-
    • 3. CCT's Ref No.BII(1)/141/2017 DT: 11.04.2017Audits and Assessments - Rule 59 of APVAT Rules 2005 –Procedures to be followed

    G.D. Goenka WRIT TAX No.- 146 of 2013 dt 9.12.16 99 VST 188 - grant of non-exclusive licence to Franchisee for use of Brand name of petitioner under the agreement for consideration is exigible to tax under VAT Act, 2008 and judgments in Bharat Sanchar Nigam Ltd. and another (supra) and State of A.P. Vs. Rashtriya Ispat Nigam Ltd. (supra) are neither applicable to the facts of present case nor lay down a different law.

    Punjab and Haryana
    Indo Arya Central Transport 98 VST 21 - Vehicle running upon fixed rails –Excluded from definition of “goods vehicle”-Goods transported in such vehicle –Cannot be detained

    Professional Updates- April 2017

    AP VAT

    Supreme Court

      • Ayyasamy vs. A. Paramasivam AC 8245-8246/16 dt 4.10.16 (2016) 10 SCC 386 – 10. 'Fraud' is a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. Fraud can be of different forms and hues. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. ………. (Ramesh Kumar & Anr. v. Furu Ram & Anr., (2011) 8 SCC 613.)
      • Syscon Consultants AC 2910/13 dt 19.9.16 (2016) 10 SCC 353-Once, it is found that justice of the case on facts does not require interference, this Court, even at the appellate stage, is well within its discretion to stay its hands off, as held in Taherakhatoon (D) by Lrs. v. Salambin Mohammad (1999) 2 SCC 635
      • Imax Corporation AC 34009/13 dt 10.3.17 – (Cause of action in India and Arbitration in London) – High Court committed an error in observing that the seat of arbitration itself is not a decisive factor to exclude Part-I of the Arbitration Act.

    High Court

      • Venkateswara Electrical and General Stores WP.24957/16 dt.18-08-16 - the petitioner admitted non-disclosure of the turnover, and accepted their liability to pay tax thereon….. there is no justification in denying them the benefit of input tax credit for the corresponding purchases made by them.
      • Sri Asta Lakshmi Rice Mill WP 38708/15 dt 30.11.15 – (purchase tax on paddy proportionate to production of husk) purchase tax levied, under Section 4(4), on paddy should be deducted from the tax levied on the sale of rice, as both paddy and rice are declared goods U/s 14 of the CST Act.


    Sri Raghavendra Enterprises – TA 255-56/11 dt 22.2.17 It is settled law that burden in revision lies on the revisional authority.

    Commissioner’s Circulars

    Ref.No.CCW/CS(1)/128/2015, dt.17.03.17–instructions issued Registrations in all acts.


    Kalpataru Agro Forest Enterprises - Trade tax Revision No. 52 of 2016, dt 4-7-16 - 2016 NTN (Vol 61) 143 (All) - Purchase of the bamboo and wood and subjecting it to process of debarking, cutting and removing roots does not bring new commercial commodity as after the process it remains bamboo and wood as such it does not amount to manufacture

    Professional Updates- March 2017

    Supreme Court
    • PATEL BROTHERS AC 49-50/2017 dt 4.1.17 -What, therefore, follows is that the court cannot interpret the law in such a manner so as to read into the Act an inherent power of condoning the delay by invoking Section 5 of the Limitation Act, 1963 so as to supplement the provisions of the VAT Act which excludes the operation of Section 5 by necessary implications
    • Advance Gases & Consultants AC 1337/10, dt 16-3-16 (2016) 54 PHT 177 (SC) - The process of cleaning and testing of cylinder cannot be seen as independent of the sale transaction. Therefore, service charges collected for cleaning and testing cylinders shall form part of sale price and turnover for sale of oxygen for levy of tax.
    High Court
    Digital Factor – WP 15984/16 dt 24.6.16 (63APSTJ1) - presumption contained in Section 47 of the AP VAT Act, 2005 is rebuttable presumption and the assesse can rebut the presumption that the goods has crossed the border check post of the state and not intended for sale in the State by producing evidence

    Fresco Juices – TA No.60/2016 dt 25.10.16 - In the present case the vehicle which was checked at the check-post is the same number mentioned in the e-way bill. Hence the authorities are not right in imposing penalty (Section 10A of CST Act was brought to the notice of Tribunal)

    Commissioner’s Clarifications
    CCT’s Ref No.Enft /E3/6/2017 dt 31-01-17 – clarification on the procedure of eTranshipment Goods coming from outside the state through Railways- transhipped in Trucks to other states

    DC orders
    AP Paper Mills - R. F. No.6/2015-16 dt 3.2.17 (DC 726) – scrap of sales forest wood brought to tax – (forest wood scrap fit to be firewood and exempted – not put in reply show cause notice)

    Patna High Court
    Mappra Laboratories WP 18626/14 dt 4th May, 2015, (2016) 24 KTR 358 (Patna)] - State Legislature not being competent to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned. The matter goes to the root of the competence of the State Legislature under the Constitution to frame any such enactment and if it is not competent to enact such a measure then it is equally not competent to do the same by way of providing option for levy of tax upon the dealer in such matter.

    Jharkhand HC
    Express Infratech WP 2852 / 2014 dt 3.5.2016 (2016) 55 STJ 501 (Jhar) - There is no loss of revenue to the State of Jharkhand even if this amendment is carried out with retrospective effect. The goods, which are purchased from 8 different States like West Bengal & Maharshtra etc. and which has been given validated date as 04.02.2011 by this registered dealer having certificate of registration, which includes the aforesaid capital goods. In that eventuality this petitioner will have to pay Central Sales Tax @ 2%