HERE STARTS THE LITIGATION IN GST-- First case before Delhi HC by Delhi based practising lawyer Mr JK Mittal (He is also qualified CA) Supp...
HERE STARTS THE LITIGATION IN GST-- First case before Delhi HC by Delhi based practising lawyer Mr JK Mittal (He is also qualified CA)
Supply by Unregistered Supplier to Registered Recipient - Reverse charge
Challenges the constitutional validity of Section 9 (4) of CGST Act, Section 5(4) of The Integrated Goods and Services Tax Act, 2017 (IGST Act) and Section 9 (4) of DGST Act.
Grounds of challenge
It is pointed out that these provisions were not to be found in the model laws prepared by the GST Council. Inasmuch as it seeks to collect GST on 'reverse charge' basis from a person registered under the CGST Act, IGST Act or DGST Act in respect of goods supplied and services received by such person from a person who has not been so registered.
The petitioner submits that this provision lacks a proper corresponding machinery provision to facilitate its implementation, and is therefore ultra vires the statute;that this provision is incapable of being complied with and is bound to cause undue hardship to the persons registered under the aforementioned three statutes.
The categorical averment is that the impugned notifications are in violation of the mandatory statutory requirement inasmuch as the GST Council had recommended that legal services as a whole would be amenable to GST only on 'reverse charge' basis.
After considering the submissions, the High Court observed thus -
"14. …it is plain that as of date there is no clarity on whether all legal services (not restricted to representational services) provided by legal practitioners and firms would be governed by the reverse charge mechanism. If in fact all legal services are to be governed by the reverse charge mechanism than there would be no purpose in requiring legal practitioners and law firms to compulsorily get registered under the CGST, IGST and/or DGST Acts. Those seeking voluntary registration would anyway avail of the facility under Section 25 (3) of the CGST Act (and the corresponding provision of the other two statutes). There is therefore prima facie merit in the contention of Mr Mittal that the legal practitioners are under a genuine doubt whether they require to get themselves registered under the three statutes. In the circumstances, the Court directs that no coercive action be taken against any lawyer or law firms for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Central Government and the GNCTD and till further orders in that regard by this Court."
The matter is directed to be listed on 18th July 2017.
MORE LITIGATION WILL FOLLOW
GST Law has many complexities
Suitable clarifications have not not issued
Assessee to comply with law which is not clarified suitably from Government Side.
Internationally, there are GST Guides - general as well as industry wise to help impacted persons in proper implementation of GST.
But, not so in India.
Law made, people will interpret on their own and then will apply.
COMMENTS