GST – Separate registrations of two verticals- Petitioner is engaged in the sale of natural gas and the provision of transmission services for natural gas. For administrative convenience, petitioner obtained separate GST registrations for its trading and transmission verticals. The trading vertical collected the GST component on transmission charges from customers as a
GST – Separate registrations of two verticals- Petitioner is engaged in the sale of natural gas and the provision of transmission services for natural gas. For administrative convenience, petitioner obtained separate GST registrations for its trading and transmission verticals. The trading vertical collected the GST component on transmission charges from customers as a reimbursement of the amount paid by the transmission vertical – Revenue authorities issued a show cause notice under Section 76 of the CGST Act, alleging that petitioner had collected tax from customers but failed to remit the same to the Government – Whether the show cause notice issued under Section 76 of the CGST Act is maintainable – HELD – The findings recorded in the show cause notice itself indicated that the exact amount collected from customers as the GST component was paid to the Government exchequer by the transmission vertical – Thus, it is claimed as a payment-and-reimbursement arrangement by the same person. Section 76 of the CGST Act, which deals with the collection of tax but non-remittance to the Government, cannot be invoked in the present case as there was no discrepancy between the amount collected and the amount remitted. The bifurcation of petitioner’s operations into separate registrations for the trading and transmission verticals was for administrative convenience and accounting clarity. The transactions between the two verticals could not be construed as transactions between two separate persons – The show cause notice was issued without proper appreciation of the facts and the applicable legal position, and accordingly, the same is quashed – The writ petition is allowed
reimbursement of the amount paid by the transmission vertical – Revenue authorities issued a show cause notice under Section 76 of the CGST Act, alleging that petitioner had collected tax from customers but failed to remit the same to the Government – Whether the show cause notice issued under Section 76 of the CGST Act is maintainable – HELD – The findings recorded in the show cause notice itself indicated that the exact amount collected from customers as the GST component was paid to the Government exchequer by the transmission vertical – Thus, it is claimed as a payment-and-reimbursement arrangement by the same person. Section 76 of the CGST Act, which deals with the collection of tax but non-remittance to the Government, cannot be invoked in the present case as there was no discrepancy between the amount collected and the amount remitted. The bifurcation of petitioner’s operations into separate registrations for the trading and transmission verticals was for administrative convenience and accounting clarity. The transactions between the two verticals could not be construed as transactions between two separate persons – The show cause notice was issued without proper appreciation of the facts and the applicable legal position, and accordingly, the same is quashed – The writ petition is allowed
