Page 40 - GSTL_16th July 2020_Vol. 38_Part 3

J82 GST LAW TIMES [ Vol. 38
The missive has given GST Inspectors and Officers a reason to conduct
“surprise visits”, armed with search warrants, Industry bodies have complained.
The Association of Indian Medical Device Industry has petitioned Finance Minis-
ter Nirmala Sitharaman to stop the inspections, arguing that it is causing har-
assment.
Alert from Intelligence
It has argued that hand sanitisers are classified as “drugs” as manufac-
turers obtain a drug manufacturing licence. Besides, it said, the product is used
by medical professionals to sanitise their skin before a surgery and for cleaning
wounds and has pharmaceutically active ingredients that have both therapeutic
and prophylactic value. The trade body has also argued against its classification
as either a cosmetic or a disinfectant.
Further, the association has pointed to the Commerce and Industry Min-
istry’s notification of June, which had put alcohol-based hand sanitisers under
Tariff Heading 3004 to argue its case.
Hand sanitiser is the latest product where there is a GST dispute due to
classification of product into two different tax slabs. Government officials, who
are seeking a merger of the 12% and 18% slabs into one, with a combined levy of
16-17%, have said that the move will end these disputes.
In a large number of countries, there is just one or two rates, but the GST
Council opted for multiple rates - ranging from 5% to 28%, with Compensation
Cess added in case of sin and luxury goods such as cars, soft drinks and tobacco -
arguing that a single rate was not feasible and two rates would result in either a
revenue loss for the Government or heavy burden on some consumers.
[Source : Rupali Mukherjee & Sidhartha in The Times of India, Mumbai,
dated 9-7-2020]

HC notice to Centre on Ashok Leyland’s petition over GST

The Uttarakhand High Court has issued notice to the Centre on a peti-
tion filed by Ashok Leyland over Goods and Services Tax (GST). Ashok Leyland
said as against 100 per cent. upfront exemption under the Area Based exemp-
tions, reduced benefit had been given through refund of only 58 per cent of the
Central GST and 29 per cent of the Integrated GST paid through cash ledger.
[Source : Business Standard, New Delhi, dated 11-7-2020]

Membership fees collected by clubs not liable to GST

The membership or admission fee charged by clubs is not for services
provided, and hence does not fall under the ambit of Goods and Services Tax
(GST), the Maharashtra Appellate Authority for Advance Ruling (AAAR) has
said. The appellate body said that since the membership fee of the appellant-
Rotary Club of Mumbai Queens Necklace-is used for meeting administrative ex-
penditure and is not in lieu of any specific facility or benefits being provided, it
does not fall under the ambit of taxation, and hence no credit against it can be
availed.
“We hereby hold that the amount collected as membership subscription
and admission fees from members is not liable to GST as supply of services,” the
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