Published on: 02nd January 2023 at 10:12 IST
Court: Supreme Court of India
Citation: Union of India v. Mohit Minerals (P) Ltd., (2022)
Honourable Supreme Court of India has held that the “Inter-State supply” is defined for the purposes of the charging under aegis of Section 5(1) of the Integrated Goods and Services Tax Act, 2017.
The key provision is relevant to determine whether the taxable event is services supplied by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
It is held that only the Union Government has power to specify categories of supply of goods or services or both where the tax shall be paid on a Reverse Charge Mechanism.
110. Section 5(1) levies IGST on all “inter-State supplies” of goods or services or both. Section 5(3) of the IGST Act confers power on the Central Government, on the recommendation of the GST Council, to specify categories of supply of goods or services or both where the tax shall be paid on a reverse charge basis by the recipient. While analysing the respondents’ contention, it is important to contextualise the purpose of GST and the constitutional amendment to effect it.
In modern commerce, the distinction between goods and services is increasingly becoming a matter of degree than substance. GST seeks to focus on the taxation of “supply” of goods or services. The provisions of the IGST and the CGST Act focus on implementing a workable machinery to adequately capture the complexities of supply in a global and digital age.
Drafted By Abhijit Mishra