Latest Blogs from SBS and Company LLP

    The Hit and Miss of Gujarat High Court in Munjaal Manishbhai Bhatt – 1/3rd Deduction for Transfer of Land


    Gujarat High Court strikes again, this time holding that providing an adhoc and standard method to value of undivided share of land involved in provision of construction services as invalid and has Para 2 of Notification No 1/2017 – CT (R) to be read down.

    Before going into the detailed study of ruling for understanding the hit and miss of the Court in Munjaal Manishbhai Bhatt[1],  it is necessary to understand the issue involved, the major arguments by petitioner and revenue and the analysis of High Court. Let us proceed to examine the same. Our analysis on the judgment and way forward is given at the conclusion of this article.

    Management Support Services vis-à-vis Other Income – An Analysis on position under Treaties


    In our previous article[1], the concept of taxability of management support services (for brevity ‘MSS”) under fee for technical services (for brevity ‘FTS’ or ‘FIS’) clause has been analyzed in detail.

    We have concluded that MSS is not taxable under Article 12, since the term ‘managerial’ is not included in the definition of FTS/FIS. However, we cannot conclude the non-taxability of such income only on examining Article 12. The examining of taxation of such income will not be completed without analyzing the taxability of such services under Articles which deals with ‘Other Income’.

    SBS Wiki E Journal July 2022

    In this 96th edition, we bring you detailed articles on certain tax issues, which seemed to be settled but really unsettling the accepted ideology. The article analysing the judgment of Supreme Court in the matter of Northern Operating Systems raises certain important questions which may have a direct impact on the judgment handed over to us by the Supreme Court. The next article is part of the series of various facets of taxability of management support services. In this part, we have analysed the impact of taxability of said services vis-à-vis other income.

    The next article is on the judgment of Gujarat High Court in the matter of Munjaal Manishbhai Bhatt, wherein the High Court read down Para 2 of Notification No 11/2017 – CT (R). We have made certain comments which may have an impact on the judgment in the succeeding forums.

    I hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.




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    Analysis on Supreme Court Judgment in Mohit Minerals – Striking Down the Levy on Ocean Freight


    The entire country is swayed by the Honourable Supreme Court’s verdict in the matter of Mohit Minerals Private Limited[1]. This is completely unexpected decision after what we have seen in VKC Footsteps India Private Limited. The Supreme Court has struck down the obligation to pay tax under reverse charge mechanism by the importer. Earlier, the Gujarat High Court qua writ petition filed by Mohit Minerals Private Limited[2], has held the notifications bringing the tax under reverse charge mechanism are ultra-vires the law. The said judgment was appealed before the Supreme Court by Revenue, which led to the current judgment. In this write -up, we shall analyse the decision delivered by Supreme Court.

    The entire issue is, whether the importer is liable to pay tax on ocean freight services provided by foreign shipping line qua the foreign supplier under the reverse charge mechanism for the CIF contracts? The position under service tax law[3] and the analysis of the decision of Gujarat High Court[4] can be accessed here.

    The Supreme Court after listening to the appellant (the Union of India) and the respondent (Mohit Minerals Private Limited) has opined on various issues, which are summarised hereunder:

    Certain Interesting Issues in Refund of Old Taxes vis-à-vis Transitional Provisions in GST Laws


    The transition to GST from erstwhile regime is quite a challenging one for the entire country. Though the transitional provisions contained in the GST laws have been substantially improved from the bill stage to the current stage, there is still vacuum prevailing, which is causing great hardship for the tax payers. The GST Council should take stock of all such aspects and provide appropriate relief, so that the tax payers are relieved from the burden of reaching the courts time and again. In this article, we have identified certain issues, which create a problem for the taxpayers.  

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