GST Daily – Editorial Team
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Today’s newsletter analytically summarizes the top GST stories reported at taxmann.com.
Cess imposed under Meghalaya Cement Cess Act, 2010 is ultra vires as per Constitution of India: HC ?
Megha Technical & Engineers (P.) Ltd. v. State of Meghalaya - [2022] 137 taxmann.com 272 (Meghalaya)
The petitioner filed a writ petition and submitted that the cess imposed by the State of Meghalaya by the Meghalaya Cement Cess Act, 2010 was completely illegal, without any authority and grossly prejudicial to the petitioner and others connected with the cement industry. It was also submitted that the charging section levied cess on the person manufacturing or producing cement within the State and it would amount to a kind of additional excise duty imposed though in the guise of cess. ? ? ?
The Honorable High Court observed that cement was not included as one of the excepted products in Entry 84 of List I of the Seventh Schedule of the Constitution and the State has no authority to levy a tax or the like on the manufacture of cement in the State. Moreover, Entry 54 of the State List does not authorize State to impose a kind of excise duty on the sale or purchase of goods. Therefore, it was held that the Meghalaya Cement Cess Act, 2010 imposing cess on the production of cement was ultra vires the Constitution of India as State was not empowered to levy such impost and the State was directed to refund 20% of the amount realized from manufacturers and invest 30% in procuring medical equipment for Government Hospital, Shillong.
The restaurant industry considers a "Service Charge" as a fee that is levied over and above the price of the food and drink for the additional convenience of serving inside a restaurant. As per the GST law, GST will be charged on the 'transaction value'. Transaction value is the price actually paid or payable for the supply of goods/services between unrelated parties. In this article, the author has analysed the levy of GST on the service charge collected by the industry in light of judicial precedents.
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