Birbal’s Update
July 2019
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Key Updates

Budget Highlights 2019-20 :The Union Budget 2019-20 has been presented by the Hon’ble Finance Minister in Parliament, today

Recent Judgements

Gujrat High Court - AAP & CO (Chartered Accountants through Authorised Partner) Vs. Union of India.

Arrest Provisions under GST Act - Union of India vs. Sapna Jain [SLP(Crl.) No.4322-4324/2019]

The Hon’ble Supreme Court of India in the order passed on 27th May 2019, explicitly upheld the Telangana High Court’s judgement. The Apex Court while hearing the SLP with the main case being of Union of India vs. Sapna Jain, where the Bombay High Court decided that pre-arrest bail can be granted to the accused for tax evasion, ordered that a three-judge bench would decide the matter in order to remove any conflict between the High Courts’ decisions.

The case revolves around the application of Section 132 of the Central Goods and Services Act 2017. Section 132 talks about when GST officers can arrest an accused for the reasons specified in the section. The Supreme Court’s vacation bench of Chief Justice Ranjan Gogoi and Justice Aniruddha Bose stated that due to there being divergent views in the matter, a three-judge bench of the Supreme Court will decide on the matter and consequently ordered for notices to be sent out to the parties. Interestingly, the Hon’ble Supreme Court also refused to interfere with the order of the Hon’ble Bombay High Court of granting a pre-arrest bail and stated that this question of bail would be decided by the three-judge bench. This means that in the interim period till the Hon’ble Supreme Court decides the case, the relief provided by the Hon’ble Bombay High Court would stand.

High Court not to go into merits of decision given by GST Appellate Authority for Advance Rulings (AAAR) - JSW Energy Vs Union of India and ors.

The Hon’ble Bombay High Court upheld section 103 of the Central Goods and Services Tax Act, 2017, stating that the advanced ruling that has been pronounced by the Authority or the Appellate Authority for Advanced Rulings shall be binding on the applicant and the jurisdictional officer. This section ruled that the cases decided by the AAR and AAAR cannot be brought before it merely because the statute does not provide for any further remedy. The Hon’ble High Court in its decision stated that it would not go into the merits of any such case that has been brought before the Hon’ble Court and that the case would automatically amount to a case of judicial review under Articles 226 and 227 of the Constitution of India. Furthermore, the Hon’ble High Court stated it holds the power to decide if the principles of natural justice were conformed with even without going into the merits because it isn’t concerned with the decision but only the decision-making process. It is concerned only with the correctness of the decision-making process and not the correctness of the decision itself.

The Hon’ble High Court held that in cases of judicial review under cases brought under Articles 226 and 227, the Court is mainly concerned with issues like the decision-making authority exceeding its jurisdictional limits, committing errors of law, acting in breach of principles of natural justice or otherwise while arriving at a decision which is ex-facie unreasonable or vitiated by perversity.

Policy Updates

35th GST Council Meeting

The Goods and Services Tax (GST) Council held its 35th Council meeting on June 21st, 2019 at New Delhi. The Meeting was chaired by the current Union Finance Minister, Mrs. Nirmala Sitharaman. A number of issues pertaining to indirect tax were discussed. Following are the key takeaways from the meeting:

1. Extension of deadline-The GST Annual return deadline has been extended to 31st August 2019. The extension has been done for two months for filing of GSTR-9, GSTR-9A and GSTR-9C for the financial year 2017-18.

i. GSTR-9 is the Annual Return for a Normal Taxpayer

ii. GSTR-9A is the Annual Return for a taxpayer registered under the composition levy anytime during the year

iii. GSTR-9C is for GST registered taxpayer to whom GST audit is applicable

2. Registration through Aadhar: GST registration through Aadhaar has been introduced. Earlier, other identity forms of identity proof and address proof were required.

3. Tenure of NAA extended: The tenure of National Anti-Profiteering Authority (NAA) has been extended by two years. The National Anti-Profiteering Authority has been constituted under S. 171 of the CGST Act, 2017 to ensure that the reduction in the rate of tax or the benefit of input tax credit is passed on to the recipient by way of commensurate reduction in prices.

4. GST Appellate Tribunal (GSTAT): The GSTAT has been authorized to be the appellate authority and deal with matters arising from the central and state tax authorities.

5. Penalty for delay: A penalty of 10% introduced for delay in depositing the profiteered amount by more than 30 days.

6. Other important takeaways:

i. For (Business to Business) B2B transactions, a new e-invoicing system is to be implemented from January 1st, 2020.

ii. E-ticketing has been made compulsory for multiplexes.

iii. The proposal to cut down GST rates for electric vehicles has been referred to the Fitment Committee and has been postponed for the next Council meeting.

iv. Discussion on valuation rules for goods and services relating to solar power generating systems has also been postponed to the next Council meeting.

v. Two pending cases that were before the High Court and the Supreme Court have been referred by the Council to the Attorney General of India.

vi. E-way bills are to be blocked in case of non-filing of GST returns for two consecutive periods

The contents of this Birbal's Update are intended for information purpose only. The Birbal's Update is not in the nature of a legal opinion or Advice and should not be treated as such. Hammurabi & Solomon does not warrant the accuracy and completeness of this Birbal's Update, and readers are encouraged to seek professional advice before acting upon any of the information provided therein. The Firm will not be liable for any loss whatsoever arising out of the use of or reliance on the contents of this Birbal's Update. This Birbal's Update is the exclusive copyright of Hammurabi & Solomon Partners and may not be circulated, reproduced or otherwise used by the intended recipient without the prior permission of its originator.

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