Category: Supply

ISSUE:

Whether the issuance of gift vouchers by Kalyan Jewellers constitutes a supply of goods or services under the GST Act?

If the issuance of gift vouchers is deemed taxable, determining when the tax liability arises—at the time of issuance or at the time of redemption?

Whether gift vouchers qualify as “actionable claims” under Section 2(1) of the GST Act, thereby exempting them from GST according to Schedule III?

RULE:

Vouchers, as payment instruments, are not taxable as goods or services unless linked to specific goods or services at issuance; otherwise, tax arises at redemption when the supply is identified.

Actionable claims, representing rights to future payment, are exempt from tax to avoid premature taxation, and PPIs are treated under financial standards, not as sales transactions, impacting their GST treatment.

ISSUE:

Whether GST is applicable on liquidated damages imposed due to delays in contract performance?

Whether liquidated damages constitute an independent supply or an adjustment to the contract price?

Whether the time of supply for GST purposes arises upon the occurrence or establishment of delay?

Whether liquidated damages qualify for input tax credit by the contractor?

RULE:

Liquidated damages payable due to delays in contractual performance are considered a taxable supply under the GST Act when they constitute an agreement to "tolerate an act" or a situation.

ISSUE:

Whether the partial amount recovered from the employees for facilitating transport would be construed as a supply of service by the Applicant?

If such service is construed as supply, then how will the value of said supply be determined keeping in mind that employee and the Applicant are related parties as per GST law?

RULE:

The facilities provided to their employees that are not integrally connected to the functioning of the business cannot be construed as a supply.

ISSUE:

Whether the GST would be payable on recoveries made from employees for providing canteen facility at subsidized rates in the factory and office?

Whether the GST would be payable on recoveries from employees for providing bus transportation facility? If yes, whether the applicant is exempted under notification no. 12/2017 Central Tax (Rates)?

Whether the GST would be payable on the notice pay recoveries from employees, who do not serve the full notice period?

RULE:

When an employer provides services to employees through third-party vendors, the employer is considered the recipient of the services. Such services are not in the course or for furtherance of business and, therefore, do not constitute a “supply” under GST. As a result, recoveries made from employees for these services do not attract GST.

ISSUE:

Whether the subsidy received from the state government would form part of consideration under section 2(31) of the Central Goods and Services Tax Act, 2017 (CGST Act)?

RULE:

Subsidies are not part of consideration in the ordinary and commercial sense. A subsidy is financial assistance provided by the government to promote the public good. It is not payment made by a customer for goods or services.

ISSUE:

Whether or not the value of free of cost supplies by the principal is included in the value of supply by the job worker under the Goods and Services Tax (GST) regime?

RULE:

Free of cost supplies are not part of the consideration received by the job worker for the services provided. Consideration is the price paid by the customer for the goods or services supplied. Since the principal supplies the components free of cost, the value of these components is not part of the consideration received by the job worker.

ISSUE:

Whether the medicines, drugs, stents, consumables, and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures would be considered as a "Composite Supply" of health care services under GST and consequently can exemption under Notification No.I2/2OI7 read with. Section B(a) of GST be claimed?

RULE:

The supply of medicines, drugs, stents, consumables, and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply of health care services and is exempt from GST under Notification No.12/2017-CTR dated 28.06.2017.

ISSUE:

Whether the services provided by the University to its constituent colleges (viz) self-financing and management colleges relating to admission to, or conduct of examination by such institution by way of affiliation fee, registration fee such as Application form fees, Inspection fees (each course/section) are exempted from GST under Notification No.12/2017-CTR dated 28.06.2017?

RULE:

The services provided by a university to its constituent colleges relating to admission to, or conduct of examination by such institution by way of affiliation fee, registration fee are not exempted from GST.

ISSUE:

Whether the company is liable to pay Goods and Services Tax (GST) on the penal Charges that it recovers from its borrowers for late payment of EMIs?

RULE:

The rule in Re: Bajaj Finance Ltd., 2019 is still being determined by the Supreme Court of India. However, there have been conflicting rulings from different courts and tribunals on the issue of whether GST is payable on penal charges recovered from borrowers for late payment of EMIs.

ISSUE:

Whether the Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017 apply to ocean freight under the reverse charge mechanism (RCM) for cost, insurance, and freight (CIF) imports?

RULE:

The Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017 do not apply to ocean freight under the reverse charge mechanism (RCM) for cost, insurance, freight (CIF) imports.