GST on Train Ticket Cancellation Applicable to AC Class Only: Railway Clarifies.

Amidst confusions arising with regard to the levy of 5% GST on the penalty amount for cancellation of the train tickets, the South Central Railways confirmed that the levy is applicable only to the AC Classes.

News of 5 percent GST on cancellation of all train tickets was widely being circulated on social media. However, giving clarity, official sources have confirmed to Deccan Chronicle that no GST is levied up on cancellation of non AC railway tickets.

Reportedly, there will be no GST charges levied on penalty for cancellation of Non-AC travel tickets, whereas levying a 5 percent GST on penalty for cancellation of AC class tickets is an existing tariff since July 1, 2017. When the cancelation is done, 5 percent is deducted only on the penalty charges, and the GST which is collected on the whole fare will be returned to the customer, said a senior official.

The railways also gave the standard charges of cancellation fees. If a confirmed ticket is cancelled before 48 hours of scheduled departure of the train, flat cancellation charges will be Rs 240 for First AC, Rs 200 for Executive class or 2 tier AC, Rs 120 for AC 3 tier, AC chair car, AC economy.

Cancellations which are done less than 12 hours and up to 4 hours before the scheduled departure of the train or up to chart preparation, whichever is earlier, will attract a 50 percent of fare paid subject to the minimum charges.

No Penalty u/s 271C when delay in Filing Appeal occurred due to Ambiguity on direction contained

No Penalty u/s 271C when delay in filing appeal occurred due to ambiguity on direction contained in statutory document, so was held by the Income Tax Appellate Tribunal (ITAT), New Delhi.

The assessee, M/s. Vipul Ltd filed a return declaring income of Rs. 2,33,94,820/- and the case was taken up for scrutiny. The assessee company is engaged in the business of real estate development and related activities and is following the percentage completion method.

The AO observed that the assessee had paid external development charges (EDC) to HUDA for which advance tax has not been deducted. The AO observed that HUDA is a taxable entity carrying out activities to acquire, develop and dispose of land for residential, commercial and institutional purposes in urban states of Haryana. It is not a part of Government or Corporation established under a Central Act which is exempted u/s 196 for deduction of TDS and accordingly 30% of Rs. 4,95,24,157/- was added back to the income of assessee.

The Counsel for the assessee, submitted that the CIT(A) has erred both in facts and law in rejecting the contention of the appellant that the payments of EDO have been made to comply with the terms and conditions of the agreement executed between the appellant and the Governor of Haryana, acting through Director Town and Control Planning, Haryana and thus provisions of TDS are not applicable on such payments, and therefore disallowance of Rs. 1,48,57,247/- made u/s 40(a)(ia) of the Act is highly unjustified, uncalled for and bad in law.

The Bench consisting of Dr BRR Kumar, Accountant Member and Anubhav Sharma, Judicial Member relied on the judgment in TDI Infrastructure Ltd v. Addl CIT, and held that “Once the fact of receipt of amounts received by HUDA being deposited in Consolidated Fund of State is established, there can be no second opinion that Assessee was rightly directed by DTCP, Haryana to not deduct the TDS. Even otherwise no intentional default is attributed to assessee and the default, if any, was on account of ambiguity which had arisen out of a direction contained in a statutory document, so no penalty can be justified u/s 271C of the Act, which is meant to address contumacious conduct.”

Implants, Surgical Items and Medicines sold by Hospital not ‘Sale’: Rajasthan HC quashes VAT Demand.

While quashing a VAT demand, a division bench of the Rajasthan High Court has held that the implants, surgical items and medicines sold by the hospital to the in-house patients.

The High Court, while hearing a bunch of petitions by the department and hospitals wherein the department contended that the respondents, who are clinical establishments, nursing homes, hospitals providing health care services to the in-house patients, while selling medical equipment/devices, implants during the course of treatment, surgery, have not discharged sales tax/VAT on the said transactions even though it has been admitted that implants, consumables, drugs, pharma etc. have been sold during the course of treatment.

Justice Pankaj Bhandari and Justice Sameer Jain held that the significance of Entry 86 is attracted in the case of outdoor patients when the transaction in question is an isolated transaction of sale of goods in the form of medical equipment/devices and implants. There is no predominance of medical treatment in the said transaction, unlike in the case of indoor patients. Therefore, the provisions of Schedule-IV and Entry 86 are not attracted and applicable in the case of medical treatment given to indoor patients even though, while rendering medical treatment, certain services like supply of medical equipment, devices, installation of implants/lenses is involved.

Holding in favour of the assessee, the Court held that the value recovered by the hospitals towards the cost of medicines, implants, stents, lenses and various other charges towards room rent, supply of food cannot be classifiable as sale or supply of goods but the transaction will be of service on account of Predominant Test/ Aspect Doctrine.