Petitioner | Del Small Ice Cream Manufacturers Welfare’s Association |
Respondent | Union of India & Anr. |
Decision by | Delhi High Court |
Date of order or Judgement | 9- February- 2021 |
Citation no. | W.P.(C) 5252/2019 2021 (2) GSTPanacea 7 HC Delhi |
Hon’ble Judge | Justice Rajiv Sahai Endlaw |
Decision | In Favour of Revenue |
No Option for Small scale Ice Cream manufacturers to pay GST under Composition Scheme. GST Council approves continuation of such exclusion from Composition Levy.
No Composition Scheme for Ice Cream Manufacturers-Facts of the Case
No Composition Scheme for Ice Cream Manufacturers-The petitioner, claiming to represent the interest of more than 50 small scale ice cream manufacturing units operating in the National Capital Territory of Delhi, has filed this petition impugning the decision dated 18th June 2017 of the Goods and Services Tax Council (GST Council), in the exercise of powers under Section 10(2)(e) of the Central Goods & Services Tax Act, 2017, of exclusion of ice cream from the benefits of Composition Scheme under Section 10 of the Act.
It is the contention of the petitioner that the said exclusion is in violation of the spirit of Articles 14 and 19 of the Constitution of India and against the principles of natural justice.
Argument Before Court
No Composition Scheme for Ice Cream Manufacturers-Petitioner’s Contention
Exclusion of Ice Cream Manufacturers From Composition Levy-The counsel for the petitioner informs that the limit aforesaid of Rs.50 lakh was successively increased to Rs.75 lakh and Rs.150 lakh It is further informed that the respondent GST Council, in its Seventeenth Meeting held on 18th June, 2017, in exercise of powers under Section 10(2)(e) of the Act, has recommended notification of ice cream and in pursuance to the said recommendation, ice cream has been notified, resulting in the small manufacturers of ice cream having turnover of less than Rs.150 lakh per annum being not entitled to take the benefit of Section 10(1) of the Act and have to necessarily go under the regime of Section 9 of the Act and to comply with all the requirements.
The contention of the counsel for the petitioner is that respondent GST Council, in exercise of powers under Section 10(2)(e) of the Act, has clubbed ice cream with pan masala and tobacco.
The counsel for the petitioner has contended that there is no reason for clubbing ice cream with sin goods like pan masala and tobacco. It is contended that pan masala and tobacco are sin goods and ice cream cannot be clubbed therewith.
No Composition Scheme for Ice Cream Manufacturers-Respondent’s Argument
The counsel for the respondents contends that besides the tax effect, several other factors including socio political weigh and are taken into consideration in taking such decisions.
Delhi High Court Held
No Composition Scheme for Ice Cream Manufacturers-Hon’ble HC enquired from the counsel for respondent, whether any study has been done by respondent GST Council, of the tax effect of extending the benefit of Section 10(1) to small scale manufacturers of other similar goods and services and whether after considering all the said goods and services, any decision has been taken to exempt all those goods and services from the benefit of Section 10(1) of the Act, the tax effect whereof cannot be absorbed by the State. At least from the minutes of the two meetings placed before us, it does not appear so.
HC is of the view that the only direction which can be issued in this petition is, to direct respondent to reconsider the exclusion of small scale manufactures of ice cream from the benefit of Section 10(1) of the Act, including on the aforesaid two parameters i.e. the components used in the ice cream and the GST payable thereon and other similar goods having similar tax effect continuing to enjoy the benefit. We direct accordingly.
The respondent to take up the aforesaid aspect in its next meeting and to take a decision thereon at the earliest, keeping in view that the ice cream season has just begun, and preferably within three months of today.
GST Council Decision
No Composition Scheme for Ice Cream Manufacturers-In view of Hon’ble High Court directions, the issue was placed before the council and the Council has approved the continuation of exclusion of ice cream from composition levy.
Considering the observations of Hon’ble Court, it was also decided that Fitment Committee shall conduct a detailed study of parameters of coverage of composition scheme, particularly as regards sectors where there was significant value addition and consumption and submit the study report before GST Council Meeting.
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DEL-SMALL-ICE-CREAM-MANUFACTURERS-WELFARES-ASSOCIATION-1
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Delhi High Court