Revenue Neutral in GST Transactions: A Legal Perspective

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"REVENUE NEUTRAL" Many times, GST Department issues Notices/Demand Order to us as to claim refund from one head and pay tax in another head. In my view, such transactions are Revenue-Neutral. GST is One Nation and One Tax, and Department should not force us.

1. Supreme Court 1.1 Nirlon Limited (23-Apr-2015) When entire exercise is revenueneutral i.e., credit of duty paid on captive consumption is available to assessee itself, extended period cannot be invoked, as assessee could not have achieved any purpose to evade duty. ARR

1.2 Anglo French Textiles (08-Jan-2018) Assessee had adopted lesser value for payment of duty and accordingly demanded certain duty and Tribunal had set aside demand on ground that entire exercise was a revenueneutral situation,

Supreme Court dismissed appeal filed against order of Tribunal holding that finding on point of revenueneutrality had been correctly arrived at by Tribunal. ARR

2. Jharkhand High Court 2.1 Mahalaxmi Infra Contract Ltd. (18-Oct-2022) ARR: As there was no mechanism to verify details of inward supply and outward supply, assessee was to be allowed to rectify inadvertent mistake especially as it is was revenue's neutral exercise.

3. Calcutta High Court 3.1 Abdul Mannan Khan (31-Mar-2023) Period of limitation for rectification had been expired, assessee should be allowed to rectify inadvertent mistake made in GSTR-1 Form, as it would be a revenue neutral exercise. 4. CESTAT (Tribunal) Ahmedabad

4.1 Kanchan International Ltd. (20-Mar-2013) Where assessee was paying excise duty on final products manufactured by it and could avail Cenvat credit on amount of service tax not paid by him under reverse charge, revenue neutrality could be invoked to set aside penalty U/s 78.

5. CESTATR (Tribunal) Delhi 5.1 DNS Contractor (10-Feb-2014) ARR: Where there was practice of contractors to pay service tax on full value, separate confirmation of demand against sub-contractors would be unjustified, even if Cenvat credit rules may require otherwise;

any such demand would be barred by principle of revenue neutrality. I hope you will find this discussion useful. Warm Regards, Abhishek Raja Ram 9810638155