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

Professional Updates


Telegana VAT / GST Update - February 2018

CA Satish Saraf Hyderabad +9196 1818 4567

Gist of Judgments of APVAT Appellate Tribunal
1 Balaji Constructions TA . 49/2009dt 18.12.17 (TVAT 1/2018) Without going into the merits of the case, as the first appellate authority i.e., the Appellate Deputy Commissioner had not discussed in his order dt.27.8.2008 on the issue raised by the appellant with regard to passing revised orders by the self-same assessing authority without any fresh material on record, it is considered fit to allow the appeal by setting aside the order of the Appellate Deputy Commissioner (CT), dt.27.8.2008.
2 Karnataka Music House TA15/09 dt 29.12.17(TVAT 12/2018) As regards the levy of interest as submitted by the appellant, the interest ought to have been levied from the due date contained in the assessment order for payment of taxes and not from the submission of the return.
3 Indian Commerce & Industries T.A.No.192/09 Dt 29.12.17(TVAT 13/2018) Section 5F clearly stipulates that where declared goods have already suffered tax, then the turnover should not be includible and where the declared goods have not suffered tax earlier, the same is taxable at 4%. Similarly Section 15 also put a restriction on the rate of tax at 4% on Steel.

GOs issued – GST (Telangana State)
1 G.O.Ms.No. 300 Dt 29.12.2017 Removal of difficulties in implementing provisions of composition scheme
2 G.O.Ms.No. 16 Dt 16.1.2018 Exemption of all tax payers from payment of Tax on advances received in case of supply of goods
3 G.O.Ms.No. 18 Dt. 22.1.2018 Amendment to certain Rules
4 G.O.Ms.No. 19 Dt. 22.1.2018 Extension of due date for quarterly furnishing of Form GSTR-1 for tax payers with aggregate turnover of upto 1.5 crores
5 G.O.Ms.No. 20 Dt. 22.1.2018 Amendment to certain Rules
6 G.O.Ms.No. 21 Dt. 22.1.2018 Waiver of late fee payable for failure to furnish return in Form GSTR- 4 by registered person opted for composition levy

Notifications / Circulars issued – GST (Telangana State)
1 TGST Notification No. 42/2017 Dt 22-12-2017 Extension of time limit for furnishing FORM GSTR-5
2 CCT’s Ref No. A(1)/129/2017 Dt 5.1.2018 extends the time limit for making a declaration, in FORM GST ITC-01
3 CCT’s Ref No. A(1)/114/2017 Dt. 5.1.2018 extends the time limit for furnishing the return in FORM GSTR-5A
4 CCT’s Ref No. A(1)/129/2017, Dt. 5.1.2018 hereby extends the time limit for making a declaration, in FORM GST ITC-01
5 CCT’s Ref No. A(1)/88/2017 Dt. 5.1.2018 the period for intimation of details of stock held on the date preceding the date from which the option to pay tax under Section 10 of the Act is exercised in FORM GST CMP-03 is extended till 31st January, 2018.
6 G.O.Ms.No. 21 Dt. 22.1.2018 Waiver of late fee payable for failure to furnish return in Form GSTR- 4 by registered person opted for composition levy

Notifications issued Under the provisions of CGST
S. No Notification No Effective from Brief particulars
01 28/2017 01-09-2017 Late filing fee for the month of July, 2017 is waived in case of Form GSTR-3B
02 33/2017 15-09-2017 Notifying the effective date for TDS provisions U/s. 51 of CGST Act, 2017 and also notifying TDS is applicable apart from State & Central Governments.
03 35/2017 15-09-2017 Notifying the due dates for filing Form GSTR-3B for the months of August, 2017 to December 2017
04 37/2017 04-10-2017 Notifying Registered person intending to Export Goods or Services without payment of IGST may file LUT (letter of undertaking) instead of Bondand LUT also applicable in case of Zero Rated Supplies
05 38/2017 13-10-2017 Notifying Causal Taxable Person (CTP) dealing in notified Handicraft Goods is not required to take registration as CTP if the aggregate Annual Turnover is less than Rs. 20.00 / 10.00 Lakhs as the case may be
06 46/2017 13-10-2017 Enhancing the Maximum Limit upto which Composition can be availed. The limit for North Eastern States enhanced to Rs. 75.00 Lakhs and for Rest of India is enhanced to Rs. 100.00 Lakhs.
07 48/2017 18-10-2017 Notifying what is Deemed Exports
08 49/2017 18-10-2017 Notifying the documentation / evidence to claim Deemed Exports.
09 50/2017 24-10-2017 Late filing fee for the months of August, 2017 & September, 2017 is waived in case of Form GSTR-3B
10 54/2017 30-10-2017 Notifying the suspension of due dates for filing GSTR-2 & GSTR-3
11 56/2017 15-11-2017 Notifying the due dates for filing GSTR-3B Return for the months of January, 2018 to March, 2018
12 64/2017 15-11-2017 Notifying the late filing fee in case of Form GSTR-3B from October 2017 onwards as Rs. 25/- per day in case of return having turnover and Rs. 10/- per day in case of –NIL- turnover return.
13 66/2017 15-11-2017 Notifying that the registered person not required topay GST on the advance received in case of Goods.
14 71/2017 29-12-2017 Notifying the due dates for filing Form GSTR-1 for those who have opted for filing on quarterly basis.
15 72/2017 29-12-2017 Notifying the due dates for filing Form GSTR-1 for those who have to file on monthly basis.

DC Orders Presently Joint Commissioner of State Taxes
1 Vikram Traders RR.No.53/2017-18 dt 05.01.2018 DC Order No. 8/18 VAT dealer shall be entitled to claim ITC on the date the goods are received by him, provided he is in possession of tax invoices and as per Rule 27(1)(d) of the TGVAT Rules,2005, tax invoice should have printed or computer generated serial numbers…..revised to withdraw ITC due to Invoices having manual numbers.(1. Interpretation of machinery provision should defeat the object of law. 2. Opportunity to be given to replace defective documents)
2 Surya Agencies RR.No.54/2017-18 dt 05.01.2018 DC Order No. 9/18 Mobile phone taxed at 14.5% in revision proceedings. (falls in Transmission apparatus other than apparatus for radio broadcasting or TV broadcasting, transmission apparatus incorporating reception apparatus, digital still image video cameras – If two interpretation possible, the interpretation favourable to the assessee is to adopted) (Mobile Phones falls under “Transmission Apparatus” falling under entry 39(15) of the IV schedule of the Act in Rc.No.E3/R/370/2014 Dt. 12-02-2016 (DC 76)
3 Sai Santhosh Trading Co 28110133695 /36110133695 dt 12.1.18 (DC 28) Revision is made due to submission of duplicate C form instead of Original C Form (no such provision is available in CST Act - Manganese Ore India Limited 83 STC 116 “that filing of original parts of declaration in ‘C’ form is not mandatory, but directory under the CST Act, 1957 read with rules thereunder”)
4 Sri Vastu Marbles R.R.NO/ 33 /2016-17 dt 12.1.18 (DC 32) Assessment revised withdrawing exemption U/s 5(3) for want of submitting export order ( no need as per Circular No. 29 - CCT's Ref.AIII(1)/57/2010 Dated: 11th July, 2011)
5 Shankara Gas Agency R.R. No.16/2017-18 dt 12.12.17 (DC 40) the revision orders taxes hire charges which is against the spirit of HC judgment in Transocean Offshore Vrs Union India in WP 44908/16 dt 6-4-17)

Appellate Joint Commissioner (earlier ADC) Orders
1 Jai Prakash Associates A/12/16-17 CST dt 17.1.18 (ADC 28) Appeal remanded. (Assessment U/s 6(2) of CST Act (Branch transfer or Consignment – rejecting F form) is to be appelled to State Highest Appellate Authority. Tribunal U/s 18A of CST Act.)


Professional Updates- January 2018

Telegana VAT / GST Update

CA Satish Saraf Hyderabad +9196 1818 4567

GOs issued - GST
1 G.O.Ms.No. 266 dt 29.11.17 Granting exemption to a casual Taxable person making taxable supplies of handicraft goods from the requirement to obtain registration
2 G.O.Ms.No. 267 dt 29.11.17 Amendments to certain Rules
3 G.O.Ms.No. 268 dt 29.11.17 Amendments to certain Rules
4 G.O.Rt.No. 607 dt 04.10.17 Constitution of the StateLevel Screening Committee on Anti-profiteering for the State of Telangana – Appointing of members for Screening Committee on Anti-Profiteering (1) Shri Mandalika Srinivas, Commissioner, Medchal GST Commissionerate (2) B.Amrutha Lakshmi, Additional Commissioner (State Tax)
5 G.O.Ms.No. 280 12.12.2017 Certain amendments to Rates of Tax on Goods and Services
6 G.O.Ms No.284 18.12.2017 Granting exemption to a casual Taxable person making taxable supplies of handicraft goods from the requirement to obtain registration
7 G.O.Ms No.285 18.12.2017 Cross empowerment to the Proper Officers appointed under CGST Act under Section 54 and 55
8 G.O.Ms No.286 18.12.2017 To make payment of Tax on issuance of invoice by registered persons having aggregate turnover less than Rs. 1.5 Crores
9 G.O.Ms No.287 18.12.2017 Amendment to certain Rules
10 G.O.Ms No.288 18.12.2017 Amendment to G.O.Ms No. 123, Revenue (CT-II) Department, dt. 30-06-2017 - Increasing the limit of composition levy from Rs. 75.00 Lakhs to Rs. 1.00 Crore
11 G.O.Ms No.289 18.12.2017 Certain supplies of goods as deemed exports
12 G.O.Ms No.290 18.12.2017 Evidences which are required to be produced by the supplier of deemed export supplies for claiming refund
13 G.O.Ms No.291 18.12.2017 Exemption of suppliers of services through an e-commerce platform obtaining compulsory Registration
14 G.O.Ms No.292 20.12.2017 Waiver of the late fee for late filing of Form GSTR- 3B for the month of October, 2017
15 G.O.Ms No.293 20.12.2017 Amendment to certain Rules
16 G.O.Ms No.294 20.12.2017 prescribe quarterly furnishing of Form GSTR-1 for those tax payers with aggregate turnover of upto 1.5 crores

DC Orders Presently Joint Commissioner of State Taxes
1 Golden Modelling Wax R. R. No. 75 / 2014-15 dt 16-12-17 (DC 506/17) If the declaration in form ‘C’ furnished by the dealer covers more than one quarter’s transaction, the ‘C’ form declaration is to be treated as invalid. (Revision is against spirit of CCT’s Ref. No.IST/D1/ OUT/ 31/2012 dt 10-05-12 - The primary objective of ‘C’ Form is to ensure that goods are dispatched to other States and same on accounted for by the dealer of other States. As long as this primary object is met, ‘C’ form can be accepted as valid. Accordingly it is clarified that Form-C can be accepted as valid relating to goods delivered in quarter, based on the date of dispatch or date of receipt of goods in other State or date of invoice or combination of all the three.)

Appellate Joint Commissioner (earlier ADC) Orders
1 Sky Gourmet Catering Private Limited S/27/2017-2018-VAT dt 7.12.17 (AJC 1197/17) High Court (Karnataka HC in Commissioner of Service Tax, Service Tax Commissionerate, Bangalore Vs. LSG Sky Chef India Limited. (46 VST 57) has concluded that sales tax could be imposed on the cost of the food articles arrived at and the remaining extent including transportation is to be treated as liable for service tax. The above case laws squarely applies to the facts and circumstances of the present case also. In the case on hand, on perusal of documentary evidence , it is observed that the appellant has raised separate bill for food and beverages and charged VAT and similarly the appellant has raised separate invoices for handling and transportation charges and charged service tax.
2 Majestic Sweets & Namkeen A/30/17-18 V dt 7.12.17 (AJC 1198/17) the Audit Officer has taken up the assessment for the year 2012-13 when such turnovers were already taken into consideration for assessment made by Dy. Commercial Tax Officer, Abids Circle, Abids Division, Hyderabad in his order AO No. 27356 dt:30-06-2015. Such action of the Audit Officer is not only leads to lack of jurisdiction and also certainly amounts to double assessment for the same period which is not acceptable under the provisions of the TSVAT Act, 2005.
3 Clarks Future Footwear R/40/2017-2018-VAT dt 20.12.17 (AJC 1239/17 it is apparent that the Assessing Authority while passing the impugned order has taken the branch transfers turnover in the CST VI returns and also the turnovers reflected in the Form VAT 200 Returns which has shown as exempt sales which results double taxation (The assessment U/s 6A(2) is to be appealed to Tribunal U/s 18A of CST Act)


Professional Updates- December 2017

Telegana VAT / GST Update

CA Satish Saraf Hyderabad +9196 1818 4567

Gist of Judgments of High Court
Sr. No Name of the Appellant Appeal No and date of decision Gist of Judgments / Orders passed
1 Reliance Petro Marketing Wp 31446 dt 18.9.17 tax revision cases are admitted on questions of law, the petitioner cannot now be compelled to pay the balance of disputed tax, as they have already paid 50% of the tax
2 APIDC Ltd 65 APSTJ 10 When the amount specified in the notice of attachment of the landed properties of the defaulting dealer bears only the principal amount tax due, and the interim directions of the Court indicate that the said amount is to be kept in an interest bearing fixed deposit, the authority are entitled to inly such amount along with interest. The assessing authority is not entitled to recover interest and penalty at the rate specified in the Act.

Tripura High Court
1 Brite Rubber Processor WP 234/15 dt 28.7.17 104 VST 27 That was the premise for such interpretation. The basis on which substantively the said interpretation is structured that Input Tax Credit is not available in respect of transfer of stock is not the correct reflection of the statute. On comparison between the sale in the course of interstate trade or commerce and the transaction of stock-transfer, inference that has been in the premise of the said impression, has not persuaded us to utilize the same in this case.

GOs issued - GST
1 G.O.Ms.No. 238 dt 26.10.2017 appointed day for section 51 (Tax Deduction at Source) - hereby appoints the 18th day of September, 2017 - payment made or credited to the supplier of taxable goods or services or both with effect from a date to be notified subsequently.
2 G.O.Ms.No. 234 dt 17.10.2017 constitutes the Telangana State Authority for Advance Ruling with the following members Sri V. Srinivas Joint Commissioner (9840295283) & J. Laxminarayana Additional Commissioner (State Tax) (+919949992679)
3 G.O.Ms No.229 dt 9.10.2017 certain amendments to Rules of Goods and Services
4 G.O.Ms No.227 dt 5.10.2017 certain amendments to Rates of Tax on Goods and Services

Commissioner’s Orders
1 Shriram Transport CCT’s Ref No. A(2)/126/2016 dt 7.11.17 Hon’ble Supreme Court of India, in the case of M/s Federal Bank Ltd. vs. State of Kerala [2007 (6) VST 736 (SC)] that the Bank would come within the meaning the expression ‘dealer’. Further, Hon’ble High Court of Madras, in the case of HDFC Bank Ltd., vs. the State of Tamilnadu vide tax revision cases numbers 64 to 67 of 2015 have taken a similar view and have taken a decision in favour of revenue. In view of the circumstances explained above, I see no reasons to defer the proceedings of Deputy Commissioner (CT), Secunderabad, now Joint Commissioner (ST), Secunderabad

Additional Commissioner’s Orders
1 Parle Biscuits CCT’s Ref No. LIII(1)/78/2017 dt 31.10.2017 Stay petition was rejected in respect of branch transfer during pendency of appeal before Tribunal. Appeal and Stay Petition for revisions U/s 6A (3) are to be filed before Tribunal U/s 18A of CST Act. Tribunal can entertain the stay petition. Further appeal if required lies to Central Sales Tax Appellate Authority New Delhi)

Appellate Joint Commissioner (earlier ADC) Orders
1 Deepak Chemicals Co A/16/16-17V dt 25.10.17 (AJC 1036/17) As the authorised representative failed to explain with material proof with regard to the difference in stock, unaccounted purchases and the turnover arrived on the basis of loose slip, I see no reason to interfere with the decision of the assessing authority on these issues. Thus the appeal fails on this score and stands dismissed (The appeal orders against the spirit of SC Judgment - Common Cause V UOI 394 ITR 220 - Entries in loose papers/sheets are irrelevant and inadmissible as evidence. Such loose papers are not “books of account” and entries therein are not sufficient to charge a person with liability. Even if books of account are regularly kept in the ordinary course of business, the entries therein shall not alone be sufficient evidence to charge any person with liability. It is incumbent upon the person relying upon those entries to prove that they are in accordance with facts. Finding of Settlement Commission disregarding such evidence as inadmissible and unreliable. The materials in question were not good enough to constitute offences to direct the registration of a first information report and investigation therein. (CBI Vs V.C. Shukla (1998) 3 SCC 410 (SC) followed.)
2 Mahendra Enterprises A/149/16-17 V dt 6.11.17 The assessing authority is not the prescribed authority to levy penalty under Section 53 of the Act where demand was raised consequent to passing of the revision order.
3 Dhana Lakshmi Off Set Printers S/24/2017-2018-VAT dt 10.11.17 (ADC 1106/17) “Cine Posters” are manufactured only on specific order by an agreement with a particular individual and such goods have no utility to any other person other than the person who placed the order Admittedly the “Cine Posters” supplied by the appellant is not a commercial commodity in the sense that it cannot be sold in the market to any other person . In view of the inclusion of the term `manufacture’ in the definition of works contract, such manufacturing activity not resulting in a commercial commodity that is marketable to any other customer, is to be treated as works contract
4 Baheti Steel Traders A/24/2017-18CST dt 24.11.17 (ADC 1148 /17) Iron and Steel is declared goods, and declared goods cannot be taxed more than 5% in absence of “C” forms

Joint Commissioner (earlier DC) Orders
1 Warangal Agencies R.R.No.A8/21/2017 dt 27.10.17 (DCO 440/17) assessment revised to tax credit notes received for non-submission of particulars (Credit Notes received is to be reduced from Purchase Price as SC judgment in Lakshmi Machine Tools 290 ITR 667)
2 Hyderabad Pigments RR No. 26 /2016-17 dt.:07-11 -2017 (DC 452/17) Regarding Misc. income Rs.22,51,526/- the dealer stated that the amount pertains to “Sundry creditors’ written off” of (5) five parties. They could only furnished Xerox copies of their ledger folios. As the dealer failed to furnish any documentary evidence issued by their creditors their objection is rejected and confirmed levy of tax on Rs.22,51,526/- @14.5% (there is no transfer of property in the goods – revision authority had not brought any material – arguable case exists - Ramsait Factory 20 STC 419 “1) Goods, 2) Seller and purchaser, 3) agreement between them for sale and purchase, 4) transfer of property in the goods from the seller to buyer as a result of the agreement between them, and 5) the price being the consideration for the transfer of property under the agreement)
3 A.P.Power Generation Corporation RR No. 5/2017-18 dt 6.11.17 (DC 456/17) the dealer except for stating that they have collected service tax and remitted to the department did not establish that the transactions are in the nature of service…The nature of charging of consideration towards hire of Cranes reveals that it has not rendered any service but received consideration for hiring out of cranes involving transfer of right to use the goods.
4 Shriram Transport Finance RC.No:- R1/ 46/2014 Dt.08-11-2017 (DC 458/17 claim of ITC is also rejected as they are unregistered dealers and are not in procession of any purchase invoices.
5 Shilpa Enterprises R.R. No. 15/ 2017-18 dt 23.10.17 (DC 460/17) revise the assessment order by invoking the powers vested in me under Sub-Section (2) of Section 32 of the TVAT Act, to bring the escaped turnover relates to Hire charges for transportation of LPG Cylinders the revision orders are against the spirit of HC judgment in Transocean Offshore in WP 44908/16 dt 6-4-17)
6 Sri Satya Sai Rice Corporation RR.No.08/2017-18 dt 15.11.17 (DC 462/17) the difference turnover of Rs.2,73,986-00 relates to Mill levy rice cuttings and request of the dealers to drop the proposed levy of tax is not considered since the assessee did not file any documentary evidence ( Levy rice cuttings are to be reduced from Sale Price and not to shown as expenditure.)
7 Diamond Sales Corporation R.R. No.04/2016-17 dt 3.10.17 9DC 466 (on procedure - kept on the web on 18.11.17 – no explanation be given for lapse of time – barred by limitation) - Credit Notes issued by M/s Wipro Limited, Hyderabad Depot clearly bifurcated the details of Credit for which it has been issued – revision confirmed – (on merits - revision might have done within 4 years from 5.10.13 – orders kept in web beyond 4 years – credit note is expected not to disturb VAT portion – credit note cannot be taken as sale amount and to be brought to tax after provision information).

Professional Updates- November 2017

Telengana VAT

CA Satish Saraf Hyderabad satish.

Supreme Court

  • Parle Agro AC 6468-6469/17 dt 9.5.17-The adjudication by CESTAT was relevant at least on the aspect that the 'Appy Fizz' is not aerated which was also discarded by the High Court as well as by the Committee of the Commissioners. In view of the aforesaid discussion, we are of the considered opinion that the appellant has successfully proved from the materials brought on the record that the product 'Appy Fizz' was required to be classified under Item No.5 of the Entry 71

TS VAT Appellate Tribunal

GOs issued

  • 1. G.O.MS.No. 214 dt 26.9.17 – Waives late pay for filing GST Returns for July Month on recommendation of GST Council U/s 128.
  • 2. G.O.MS.No. 607 dt 4-10.17 - Constitution of the State Level Screening Committee on Anti- Profiteering for the State of Telangana – (1) M. Srinvas, Commissioner of Central Tax – Medchal 2) Amurtha Lakshmi, Additional Commissioner of State Taxes
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.

CCT Circulars

CCT’s Ref No. A(1)/122/2017, dt. 27-09-17 - it is instructed that all the officers have to process the audits through system from the scrutiny module to avoid duplicity and further complications. It is also instructed to take up the audits of works contract / ITC / Entry Tax on priority and only in exceptional cases other audits are to be taken up in the interest of revenue. Further, it is also informed that in addition to the cases of works contracts, ITC, Entry Tax for the audit of remaining cases audits, the audit officers are invariably to be authorized through the scrutiny module which will be made available.

Appellate Joint Commissioner (earlier ADC) Order

  • 1. Karimnagar Milk Producer Company Appeal No. K/3/16-17 dt 19.9.17 – (ADC 952/17) - end customers after consuming drinks, returning bottles. The crates used by customers as packing material. For the usage of crates, the customers paid rental charges to the HCCL which has been considered as turnover liable to tax U/sec 4(8) of the VAT Act applying the rate of tax of packing material.
  • 2. R.K. Distilleries S/83/2016-2017-VAT dt 23.9.17 (ADC 977/17) appellant has incurred / paid tax on its raw material which has to be considered for Input Tax Credit as APBCL has remitted the entire tax on the sales made by them which includes the tax component incurred by the appellant. The facts and circumstances of A Infrastructure Limited and the present are one and the same i.e shifting point of levy without exempting the goods.
  • 3. Shreya Hearing Clinics A/221/16-17 V dt 23.9.17 (ADC 980/17) AO observed that “Aids & Implements used by handicapped persons” alone falls under entry 2 of Schedule I to the TSVAT Act, but the said entry did not takes within its ambit “accessories” thereof. Here, it is to be observed that “accessory” means “an object or device that is not essential in itself but that adds to the beauty, convenience or effectives of something else”.
  • 4. Trinity Beverages CV/9/2017-18 dt 17.10.17 (AJC 1015/17) no one can construe the product R.C. Cola either as a Fruit Juice or a Fruit drink or an health drink, but the same is one in the nature of either aerated drink or carbonated drink. Such being the case, the same falls under the exclusion clause i.e., “aerated fruit drink” as occurred in sub-entry (b) of entry 107 of the Schedule IV to the TVAT Act and since such drinks do not find place in any of the Schedules appended to the said Act, the same falls for levy of tax under Schedule V to the TVAT Act
  • 5. Dr. Reddy’s Laboratories PV/67/2016-17 dt 20.10.17 had used the Fire Bricketts purchased by them as fuel in their manufacturing process i.e., as fuel either in furnaces or boilers. Thus, there is a resemblance in character of functionalities of Fire Bricketts purchased by the appellant with that of the other fuels occurred in the above sub-rule. Such being the case, they are squarely come under the ambit of “other similar fuels used in the furnaces and boilers” under clause (q) of sub-rule (2) of Rule 20(2) of the APVAT Rules and consequently not eligible for input tax credit on such purchases.

Madya Pradesh High Court

  • 1. Malwa Vanaspati & Chemical Co WP 9091/14 dt 24.3.17 103 VST 180 - right which has already accrued in favour of the petitioner cannot be extinguished by a subsequent notification, specially when the petitioner has acted upon on the basis of first notification dated 28/02/1995. 39- Resultantly, the impugned notification to the extent it is made applicable with retrospective effect is hereby quashed.
  • 2. Cobra Instalociones y Services, S.A – WP 5999/16 dt 11.8.16 - 103 VST 219 ‘inter-state sale’ treated as ‘intra-state sale’ - Held that: - if the goods moved in the course of ‘inter-state’ movement and reaches the buyer in satisfaction of a contract of a purchase and there is a nexus between the movement of goods and the contract entered into, for which the movement of the goods takes place, then such a sale is deemed to be in the course of inter-state trade or commerce, and based on the contract of sale as is provided in the contract.

Professional Updates- September 2017

Telengana VAT

CA Satish Saraf Hyderabad satish.

Supreme Court

  • K. Naveen Kumar – AC 10242/17 dt 10.7.17 – relaxation of contempt issue - We make it clear that in the event of the appellant taking steps in terms of what is noted above, it will be open to the High Court to pass appropriate orders, de hors the stand already taken in the impugned order. In order to enable this order to be worked out, the arrest, as ordered by the High Court, will be deferred for a period of one month.
  • Common Cause V UOI 394 ITR 220 - Entries in loose papers/sheets are irrelevant and inadmissible as evidence. Such loose papers are not “books of account” and entries therein are not sufficient to charge a person with liability. Even if books of account are regularly kept in the ordinary course of business, the entries therein shall not alone be sufficient evidence to charge any person with liability. It is incumbent upon the person relying upon those entries to prove that they are in accordance with facts. Finding of Settlement Commission disregarding such evidence as inadmissible and unreliable. The materials in question were not good enough to constitute offences to direct the registration of a first information report and investigation therein. (CBI Vs V.C. Shukla (1998) 3 SCC 410 (SC) followed.

Allahabad HC
  • Commissioner Vs S/S. Krishna Collector - SALES/TRADE TAX REVISION No. – 31/17 dt 21.3.17 102 VST 179 - It is not the case here that Form-F was ever applied and was not issued. The observation made in Para-5 cannot be construed as an expression of opinion by the Apex Court by whittling down the provisions of Section 6-A of the Act. Once a statutory presumption is drawn regarding sale in the absence of Form-F, and the assessee has not been able to put forth any material, which may have been responsible for non-submission of FormF, the first appellate authority and the tribunal were not justified in interfering with the order of assessing authority, holding the assessee liable to payment of tax. The question of law framed for consideration is answered, accordingly.
  • Target Centre SALES/TRADE TAX REVISION No 244/15 dt 27.3.17 102 VST 297 - In the absence of a definition in the Act, 'arms' as a taxing entry would have to be construed as is ordinarily understood in common parlance. It is the meaning assigned to term in popular sense which must prevail. Merely because air gun can cause injury would not be sufficient to conclude that it be treated an item covered by entry 'arms and ammunition'. Subsequent division benches of two High Courts have not agreed with the view taken in M/s Agarwal Brothers, Faizabad (supra). It would, therefore, be appropriate to refer following questions to a Larger Bench

Fresh & Honest Café TA 258/2012 dt 16.2.17 - Beverages like Tea and Coffee are no doubt consumed on a large scale in today’s world and may even aid in increasing the efficiency of a person who consumes such drink. However, by no stretch of imagination, consumption of tea / coffee can be construed as for the purposes of operation or maintenance of a SEZ unit.

Advance Ruling

Isitva Steels A.R.Com/11/2017 dt 30.6.17 (AR 12/17) - Module Mounting Structure is not covered under either under Schedule – I or Schedule – IV of the TVAT Act. Therefore, it falls under Schedule – V of the said Act attracting a Tax of 14.5%.

Professional Updates- August 2017

Telengana VAT

CA Satish Saraf Hyderabad

High Court
Aditya Rice Industries 8762/17 and batch dt 23.3.17 (101 VST 286) - Assessing Officer shall take into account the mitigating factors, as indicated above and levy a penalty that will be proportionate to whatever the petitioners have done. In other words, the Assessing Officer shall show lenience in the matter of imposition of penalty.


1. Lakhmi Gayathri Industries (2017) 30 TTR 234 TVATAT - Appellant failed to pay tax due on the basis of return submitted by him on the last day of the month in which it is due. Therefore, that the orders of the assessing authority are in accordance with the law and levy of penalty @ 10% for non-payment of tax in time, no point to intervene.

2. Infres Methodex Limited 30 TTR 238 Only issue is whether the appellant is entitled to claim exemption towards sales returns when it was not reflected in the audit statement certified by the Chartered Accountant. The appellant had made claim in the CST Return fled but it was omitted to be reflected in the audit statements. This is obviously a mistake therefore we consider it expedient in the interest of justice to remit to the assessing officer to verify the claim of the sale returns and allow the same if found to be in order

3. Sanghi Polymers 30 TTR 240 - The responsibility of the appellant to pursue case position and on to know the latest position, but appellant kept quiet for nearly 5 months and now contending that the opportunity of hearing was not given. Here, the revisional authority has not committed any error and followed the procedure properly and the fault lies on the appellant in the aspect

Advance Ruling
Berakah Engineering A.R.Com/30/2016 dt 23.6.17 (AR 11/17) - clarified that the ‘Ladles’ are covered under Sub-entry 25 of Entry 102 of Schedule-IV of TVAT Act, 2005, attracting tax @ 5%.

DC Orders
Viceroy Hotels - RC.No:- R1/ 85/2016 dt 28.7.17 (DCO 372) – cocktail of different varieties of liquor considered to be different commodity and taxed at 14.5% as unclassified item

Professional Updates- July 2017

Telegana VAT Update

CA Satish Saraf Hyderabad

High Court

  • 1. Sree Krishna Automotives – WP 29390 & 29411/016 dt 31.8.16 63 APSTJ 190 - In order to claim Input Tax Credit in respect of second hand motor vehicle, it is required to produce evidence before the assessing authority showing that the vehicle purchased by the dealer has been subject to VAT at the time of its initial registration under the Motor Vehicles Act, 1988 either within the erstwhile composite State of Andhra Pradesh or the State of Telangana
  • 2. Ajax Fiori Engineering 63 APSTJ 181 - Self-loading Mobile Concrete Mixer with HSN classification 84743110 producing cement concrete used in Civil Works is classifiable as Machinery falling under Clause 39 of item 102 of the Schedule – IV exigible to tax @ 5%.
  • 3. East Coast Distributors 30 TTR 181 - Sale of Glass Jars & Plastic Jars falls under the entry No: 90 and sub-entry 4 & 12 of the Schedule – IV and liable to tax @ 5%.
  • 4. Divya Shakthi Services WP 22918/13 dt 19.8.13 (57 APSTJ 115) - the facts would reveal demanding tax on non- existing transactions would amount to demanding tax without any authority of law and the same is contrary to Article 265.

  • 1. SREI International Finance – TA No.4/09 dt 2.5.17-lease agreements were concluded outside the State of Andhra Pradesh the same cannot be taxed under the APGST Act, 1957.
  • 2. Gammon India TA No. 150/2008 dt 9.10.2015 - failure to consider an issue validly raised in the grounds of appeal before an appellate authority is a valid ground for rectifying the same as was held in the cases of ITO vs ITAT 58 ITR 634 and Laxmi Electronic Corporation vs CIT 188 ITR 398.
  • 3. Transmission Corporation of AP – TA 898/08 and batch 17-4-17 - the facts prove that it received valuable consideration by way of making cash deduction from the amount payable to the repairers of transformers – not barter transaction
  • 4. Prasad Media Corporation – TA 12/09 and batch dt 20.4.17 - sale of food across the counters operated by the appellant, we are convinced that there was no service involved in the transaction. It was a mere sale of food taxable under Section 5 alone.
  • 5. Logical Solutions TA 608/11 dt 31.8.16 - There can only be one assessment order for a tax period and passing multiple assessment orders for the same tax period is contrary to law.
  • 6. Dekars Techno Engineering T.A. NO.347/2010 Dt:03-06-16 the supply and installation of fire alaram systems has to be treated as works contract exigible to tax U/Sec. 5F read with Rule 6(3) (ii)

Advance Ruling

3F Industries A.R.Com/8/2016 dt 21.6.17(AR 10/17) - ‘margarine & vegetable fat spread’ is covered under residuary Entry in Schedule-V attracting tax @ 14.5%.

Commissioner’s Circular

  • 1. CCT’s Ref No. A(1)/53/2017 dt 4.5.17 - assessing / revisional authorities are requested that the assessment proceedings under CST Act, 1956 shall not be postponed for non filing of Statutory Forms at the instance of the dealer without a sufficient reason. In all such cases all assessment shall be completed before the time limitation and the demand raised thereon shall be collected immediately.
  • 2. CCT’s Ref. No. CS(1)/18/2015, dt 9-5-17 - Post Registration Inspection Visit/ Advisory Visit - the time limit to upload the reports is reduced to “ 24 Hours” from date of completion of the visit

DC Orders

Pride Constructions - R.R.NoJ1/97/2015-16 dt 17.6.17 – DC Order 318 – Composition scheme – Service Tax subjected to VAT as part of amount received – Arguable case exists

Professional Updates- June 2017

Telegana VAT Update

CA Satish Saraf Hyderabad

High Court

  • 1. Kartikeya Industries WP 1835/16 DT 3.2.16 63 APSTJ 84 if such Advance Ruling is contrary to the law declared by the High court, the assessing authority is bound by the Judgment of the Jurisdictional High Court and not the Advance Ruling…. The mere fact that the order of the Tribunal was found inapplicable, does not absolve the assessing authority of his duty to examine the material placed before him by the dealer
  • 2. M. Papi Reddy 63 APSTJ 130 State Government would have preferential charge over the subject property for recovery of the tax arrears and the charge or mortgage in favour of the Bank created by the principal borrower is subject to the first charge statutorily created in favour of the State Government.
  • 3. Hindustan Petroleum 63 APSTJ 107 - Merely because certain elements of expenditure are involved on account of siding and shunting charges for placing the empty wagons at the filling or delivery point, the same would not form part of the freight charges.
Advance Ruling
  • 1. Naveen Kuamr Boorgu - A.R.Com/7/2017 dt 2.5.17 – (AR 7/17) - The appellant seeking clarification on ‘He would like to know out of the Landlord portion as per Development Agreement, sales of residential flats (flats sold during the construction and flats sold after the construction) are liable to tax under the provisions of the APVAT Act, 2005’ and it was held that, the activity of the land lord seeing that an apartment is constructed for a buyer of it on hand, is equal to the activity of a builder (contractor) constructing an apartment for an on hand buyer. While explaining his facts, the applicant specifically admitted that the land lord is selling his shared apartments when the construction is in progress. Hence, undoubtedly this activity of the land lord comes into the net of VAT.
  • 2. Electro Magnetic Devices, A.R.Com/66/2015 dt 29.4.17 (AR 8/17) - Dry transformers having a power handling capacity from 0.1VA to 1KVA fall under Schedule-IV to TVAT Act, 2005 and applicable rate of tax is 5% and dry transformers having capacity exceeding 1KVA doesn’t fall under Schedule-IV to TVAT Act, 2005 and the applicable rate of tax is 14.5%, as they fall under Schedule-V to TVAT Act, 2005…. there is no Entry with regard to Chocks & Coils in any of the Schedules under TVAT Act, 2005

Professional Updates- May 2017

Telegana VAT Update

CA Satish Saraf Hyderabad

State Legislature adopted GST Bills

GOs issued

  • G.O. Ms 42 dt 3.3.17 – tax on totalisators and betting chargeable U/s 13 and 16 of Telangana Horseracing betting tax Regulation

High Court
Aditya Rice WP 8762/17 dt 23.3.17 - Considering the fact that the dealers have paid the tax at the place where the goods were threatened to be detained and also considering the fact that they have chosen to come up only after the issue of show cause notices for penalty, we are of the view that the Assessing Officer could be considerate, while considering the objections of the petitioners. This is a small reprieve that could be granted to the petitioners on account of their conduct. Hence, all the writ petitions are disposed of to the following effect:
  • 1) the prayer for refund of tax already paid is rejected;
  • 2) the petitioners shall submit their objections to the show cause notices within a period of 15 days from the date of receipt of a copy of this order;
  • 3) The Assessing Officer shall take into account the mitigating factors, as indicated above and levy a penalty that will be proportionate to whatever the petitioners have done. In other words, the Assessing Officer shall show lenience in the matter of imposition of penalty.

INDUS TOWERS TA 34/14 dt 13.03.17 We have carefully considered the submissions made and the material on record, and it appears that the assessing authority has not done proper homework of gathering evidence to substantiate his surmise that the entries represent sale of goods.

Professional Updates- April 2017

Telangana VAT


  1. 1. Regal Fitness TA 100/16 dt 11.1.17 articles and equipment for general physical exercise are covered under HSN code 9506 as part of sports equipment. ……. the impugned goods are sports goods taxableat 4%

  2. 2. Signum Fire Protection TA 291/11 and batch dt 17.1.17 - In the present case also we find that the goods are brought to the site and fixed by the appellant and not sold as chattel……Therefore, we are of the considered view that the impugned transactions are Works Contracts only and not sale.

  3. 3. Hyderabad Race Club TA 733-36 dt 18.1.17 - ‘cattle’ does not include horses and therefore oats that are fed to the horses would not come under the term ‘cattle feed”

  4. 4. S.S.V. Fab Industries TA 161/16 dt 20-1-17 – H forms can be filed before appellate authorities.

  5. 5. Shri Roopchaya Colour Studio TA 44/16 dt 20.1.17 the work of developing, processing and printing of photographs out of either negative rolls or in the form of CDs. or data storage cards, there is an element of sale of certain goods which can be taxed under Section 4(7) of VAT Act.

  6. 6. IVRCL TA No. 835,847/08 dt 10.2.17- held that the contractor is exempt from payment of tax only if a sub contractor is a registered dealer following Yograj Constructions Ltd., in T.A.No.65, dt 5-8-16

  7. 7. Hanumantha Rao TA 944/08 dt 15.2.17 (following Kakatiya Cotton Pressing Industries, 50 APSTJ 157) revisional authority ought not to have exercised revision power second time

Advance Ruling

  1. 1. Perfect Distributor A.R.Com/8/2014 dt 23.2.17 (AR 3/17) - Cell Phones / Mobile Phones”, and hence are chargeable @ 5% w.e.f. 30-07-2016

  2. 2. Ipog Industrial Technologies - A.R.Com/15/2016 dt 15.3.17 (AR 5/17) “twin core miniature control cable” falls under Schedule V to the Act liable for the tax 14.5%.

  3. 3. Schwing Stetter A.R.Com/33/2016 dt 15.3.17 (AR 6/17)self-loading mobile concrete mixer is a machinery and liable to tax @ 5%

Commissioner’s Circulars

  1. 1. Ref. No: CS(1)/39/2013, Dt: 01-03-2017 - mandatory, in the State of Telangana use of online e-waybills with effect from 07-03-2017

  2. 2. No: AIII(1)/113/2013, dt: 07-03-2017 - The Commissioner exempted Oil Manufacturing Companies (OMC) from TDS, with each other and also exempted Public Sector Organizations on purchases made from OMC’s.

Professional Updates- March 2017

Telengana VAT


Infres Methodex – TA No.353/11 dt 10.04.13 57 APSTJ 186 – Composition Scheme U/s 4(7)(c) - hold that levy of VAT tax on Service Charges Collections, Education Cess and S&H, Education Cess by the lower authorities are not sustainable under law (APHC in T. Siddaiah Naidu & Co. -107STC478 - the tax should have been included as consideration and passed on to the purchaser, is not satisfied. That being so the market cess cannot be treated as part of turnover.)

Advance Ruling

  • 1. India Private Limited A.R.Com/48/2016 dt 6.2.17 (AR 1/17) As sub-contractor is an agent to the principal contractor and by the theory of accretion, property in goods passes directly from the sub-contractor to the applicant, the transaction of works contract by a sub-contractor falls under Section 7(a) of the Act and eligible for claiming exemption
  • 2. Naulakha Refrigeration A.R.Com/37/2016 15.2.17 (AR 2/17) - Rate of tax on Nitrile Insulation Tubes (HS Code 400911000) and Nitrile Insulation sheets (400811290) of various sizes”

  • GOs issued
  • 1. G.O.Ms. No. 29 dt 1.2.17 – The Government of Telangana has amended the Schedule – VI of the Telangana Value Added Tax Act, 2005 and inserted entry No: 1H “Draught Beer produced and sold by micro-breweries” taxed at the first point of sale in the state @ 70%, with effect from 02-02-2017
  • 2. G.O.Ms No.31 dt.2.2.17 – Rule 18A & 18B and inserted Rule 18C of Telangana Value Added Tax Rules, 2005 and notified new TDS Certificates Form No: 501E & 501F, in case of Rule 18A & 18B are effective from 04-06-2015 and Rule 18C is effective from 09-05-16.

Punjab & Haryana HC
Maruti Suzuki India Ltd CEA 9/16 21.10.16 97 VST 209 - CENVAT Credit:- Excise duty– Service Tax- Input services-Manufacture of motor vehicles and parts- Mandap keeper and rent-a-cab services-cost of service included in assessable value of final product on which excise duty paid- Assessee entitled to credit-CENVAT Credit Rules, 2004

Madhya Pradesh HC
Supreme Industries Ltd WP 990/2008 dt 12-8-16 (2016) 29 STJ 385(MP) assessing authority while passing assessment order in terms of remand with specific direction, the assessing officer not kept in mind the directions contained in the order of remand. Therefore, the assessing orders were quashed and remanded further to pass afresh in the light of directions given in order of remand.