The Karnataka High Court recently held that so long the discharge of entire tax amount is not disputed and reverse charge mechanism would lead to double taxation, petitioner cannot be made liable to pay double tax as held in the aforesaid order, relieving the Goods and Services Tax ( GST ) taxpayer of undue pressure. The counsel for the petitioner submitted that pursuant to an inspection being conducted on 09.03.2023 under Section 67(1) of the Central Goods and Services Tax Act, 2017, the petitioner received communication dated 03.07.2023 from the Senior Intelligence Officer, DGGI, to which the petitioner submitted a reply, in pursuance of which, a communication under Section 73(5)/74(5) was issued to the petitioner. Know When to Say No to Cash Transactions, Click Here

Petitioner submitted a reply dated 11.12.2023, which was accepted by respondent No.2 and Show Cause Notice was issued to the petitioner calling upon them to pay a sum of Rs.1,86,94,168/- towards liability payable on the value of security services received by them. The petitioner submitted a reply dated 09.01.2024 and after taking necessary proceedings, the respondent passed the impugned order-in-original dated 21.03.2024, which is assailed in the present petition. It was submitted that the issue regarding the liability of the petitioner to pay GST under reverse charge mechanism is covered by the judgment of this Court in the case of M/s. Zyeta Interiors Pvt. Ltd., and Anr Vs. The Vice Chairman Settlement Commission and Anr passed in a Writ, which is confirmed by the Division Bench in appeal.

Know When to Say No to Cash Transactions, Click Here Read More: Absence of Strict Adherence to Ratio at the Time of Payment never leads to pay Double Tax: Karnataka HC [Read Order] It was therefore submitted that the impugned assessment order deserves to be set aside and the matter may be remitted back to respondent No.2 for verification of the payment made by service provider and to proceed further in the matter. On the other hand, the counsel for respondents supported the impugned order and submitted that there is no merit in the appeal and the same is liable to be dismissed. Know When to Say No to Cash Transactions, Click Here

The bench noted that, from the finding recorded by the Karnataka High Court in an earlier order, “so long the discharge of entire tax amount is not disputed and reverse charge mechanism would lead to double taxation, petitioner cannot be made liable to pay double tax as held in the aforesaid order.” The impugned order was resultantly quashed by the Karnataka High Court Bench of Justice S R Krishna Kumar. To Read the full text of the Order CLICK HERE