Case Law Details
CIAL Duty Free And Retail Services Ltd (CDRSL) Vs. Union of India (Kerala High Court)
Kerala High Court held that petitioner shall pay the GST on input services including Concession Fee and claim ITC of the entire tax amount and thereafter claim refund of the same by following the procedure prescribed under Section 54(3) of the Central Goods and Services Tax Act, 2017 and Kerala Goods and Services Tax Act, 2017 read with Rule 89 of Central Goods and Services Tax Rules, 2017 and Kerala Goods and Services Tax Rules, 2017.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
All the seven writ petitions are being disposed of with this common judgment as they arise out of the same cause of action.
1. In writ petitions bearing Nos.12278, 12279, 12280, 12274 & 12317 of 2020, challenge has been laid to orders whereby prayer for refund of the Input Tax Credit (hereinafter called as ‘ITC’) has been rejected for the period tabulated below, though earlier granted:-
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To ADD (in order to firm up own viewpoints ):
WRT
“………..It has, further, been held that the assessee would be entitled for refund of ITC as it would not cause any prejudice, for, first. would, pay the GST on the services provided to DFSs by respondent No.4 and then take ITC of the entire tax amount and thereafter claim refund of the same by following the procedure contained in Rule 89 of the Central Goods and Services Tax Rules, 2017.”
The purport or import of the above quoted observations are not readily understood; but are quite confusing.
REASONS:
The proposition that – as canvassed for in pr. posts- the feature of ‘ÍTC’ (a half-baked idea) , as conceived of , is intended to be availed of /claimed by the recipient of ‘input supply’, only if supply (of output) by him also attracts GST levy. As such, ‘ITC’ has no role to play and is not of application in a case in which, – such as DFS herein, – there is no GST leviable.
In essence (substance), a payment and refund of it as spoken of is the ‘GST’, that would have been otherwise payable by, and collectible by the INput supplier. It stands to be inferred that has not been done for the simple reason that the place ( so also the event) of such supply has admittedly been outside of the tax jurisdiction. If so, mention of of ‘ITC’, in more than one context, does not seem to make any sense. For, that is a feature that comes into play only for dispensing with/ nullifying an otherwise ‘cascading effect’; but in an instance of tax free supply by DFS (a ‘zero tax’ situation, so to say) ‘ITC’ is a non-starter – AGREE !?
OVER to Anyone with a sensible counter view, if at all possible but sustainable?!?
OPEN/ INvite to EDIT for a better appreciation of the mentioned proposition.
courtesy
OFFhand
The ÉDITOR’s Note reads:
Q
Kerala High Court held that PETITIONER SHALL PAY THE GST ON INPUT SERVICES INCLUDING CONCESSION FEE AND CLAIM ITC OF THE ENTIRE TAX AMOUNT AND THEREAFTER CLAIM REFUND OF THE SAME BY FOLLOWING THE PROCEDURE PRESCRIBED under Section 54(3) of the Central Goods and Services Tax Act, 2017 and Kerala Goods and Services Tax Act, 2017 read with Rule 89 of Central Goods and Services Tax Rules, 2017 and Kerala Goods and Services Tax Rules, 2017.
UQ
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The court has so held in disposing of only to one of the writs (not all the writs bunched together and dismissed); and the related court’s observations / ruling are to be found in paragraph 33 of the Judgment.
< Point To Ponder:
As differently viewed (based on ‘THE FIRST PRINCIPLES’ and founded on pure COMMON SENSE):
The direction to first pay ‘tax’ and then claim a refund of it only because of the prescribed procedure patently suffers from faulty logic. To put it differently, the procedure so prescribed is very much wanting in wisdom and absurd to the core; premised so, that needs to be revamped and rolled back in order to get rid of the absurd situation which otherwise would not have arisen but could have been easily avoided upfront.
Anyone with a sensible counter view, if at all possible but sustainable?!?
courtesy