Failure Of Kia Motors To Furnish Information For The Entry Of Demo Car Into Madhya Pradesh: Madhya Pradesh High Court Upholds GST Levy
The Madhya Pradesh High Court has held that in the absence of information given, the entry of a demo car into the state of Madhya Pradesh renders it exigible to GST.The bench of Justice Sheel Nagu and Justice Hirdesh has observed that Rule 138(1)(ii) makes it clear that the movement of goods exceeding the value of Rs. 50,000, even for reasons other than supply, makes it incumbent upon...
The Madhya Pradesh High Court has held that in the absence of information given, the entry of a demo car into the state of Madhya Pradesh renders it exigible to GST.
The bench of Justice Sheel Nagu and Justice Hirdesh has observed that Rule 138(1)(ii) makes it clear that the movement of goods exceeding the value of Rs. 50,000, even for reasons other than supply, makes it incumbent upon the supplier to inform about the supply of goods in Form-A GST, EWB-01, electronically on the common portal, along with other information as required.
The petitioner/assessee has assailed the order passed by the Appellate Authority allowing the appeal of the assessee by reducing the tax levied from Rs. 8,40,000 to Rs. 5,40,000 and the corresponding penalty from Rs. 8,40,000 to Rs. 5,40,000. The Appellate Authority set aside the cess of Rs. 6,60,000 and the penalty of Rs. 6,60,000.
The petitioner argued that the demo vehicle was transported in the state of Madhya Pradesh, not for sale, and therefore was not eligible for GST.
The petitioner contended that the bringing of a demo vehicle into the state of Madhya Pradesh would not render the transaction exigible for GST since no financial consideration is involved in the absence of a sale or purchase.
The department, while relying upon the provisions of Section 129 of the GST Act and Rule 138 of the GST Rules, contended that movement of goods exceeding the value of Rs. 50,000, even if they do not qualify the definition of supply, becomes exigible under GST.
The court, while dismissing the writ petition, held that no information as mandatory in Rule 138(1) of the GST Rules was given by the petitioner supplier.
Case Title: M/S Kia Motors India Private Ltd. Versus The State Of Madhya Pradesh
Case Citation: 2023 LiveLaw (MP) 76
Case No.: Writ Petition No. 20600 Of 2020
Date: 01/05/2023
Counsel For Petitioner: Himanshu Khemuka
Counsel For Respondent: A.D. Bajpai