Amendments clarifying tax applicability operate retrospectively, confirming that luxury tax on ICU charges is exempt based on legislative intent as clarified in the GST Council meeting.

ORDER :

1. In this petition, the petitioner seeks the following reliefs:

“(i) Call for records of the Petitioner's case in GST AP No. 45/2022-23 on the file of the 1^st Respondent;

(ii) Issue a Writ/Direction/Order in the nature of CERTIORARI, quashing/setting aside the impugned Order dated 31.07.2023 in GST AP No. 45/2022-23 passed by the 1st Respondent (Annexure - A) along with Summary of Demand dated 31.07.2023 bearing No. GST A.P. No. 45/2022-23 passed by the 1^st Respondent (Annexure - A1);

(iii) Issue a Writ/Direction/Order in the nature of CERTIORARI, quashing/setting aside the impugned Order dated 31.03.2022 bearing No. CTO(AUDIT)-1.8/GST/DRC- 7/1/T.No-/2021-22 Order u 73(1) of the CGST/KGST Act passed by the 2^nd Respondent (Annexure - B);

(iv) Pass such other or further order as this Hon'ble Court may deem in the facts and circumstances of the case, and in the interests justice and equity.”

2. Heard the learned counsel for the petitioner, learned HCGP for the respondents and perused the material on record.

3. Learned counsel for the petitioner invites my attention to the impugned order passed by the Adjudicating Authority at Annexure-B dated 31.03.2022 and the impugned order passed by the Appellate Authority at Annexure-A dated 31.07.2023 in order to point out that despite having come to the conclusion that the petitioner was involved in the activity of conducting clinical trials, which would amount to export of services and in terms of Section 13 (2) of the IGST Act since the place of recipient of the services was situated outside the territory of India and (3)(a) of the IGST Act was not applicable and in view of the Notification No.04/2019 - Integrated Tax dated 30.09.2019 issued by the Central Government, respondent Nos.1 and 2 have come to the erroneous conclusion that the said notification was prospective in nature and application and was not retrospective without appreciating that the said notification was pursuant to the 37^th GST Council Meeting conducted/held on 20.09.2019, wherein the said issue as regards export of services in the pharmaceutical sector, including services in relation to clinical trials has been clarified, thereby indicating that the said notification clarifying the nature of services was only clarificatory and consequently, the same is retrospective in nature, application and operation and as such, the impugned orders deserve to be set aside and the adjudication proceedings initiated by the respondents against the petitioner deserve to be quashed.

4. Per contra, the learned HCGP would support the impugned orders and submit that there is no merit in the petition and the same is liable to be dismissed.

5. As rightly contended by the learned counsel for the petitioner, a perusal of the impugned order will indicate that the respondents have taken note of the aforesaid notification dated 30.09.2019, wherein it is specifically declared and clarified by the Central Government that the place of supply of services, including the nature of services as provided by the petitioner by way of the clinical trials, shall be the location of the recipient of such services, subject to fulfillment of certain terms and conditions. In the instant case, it is an undisputed fact as borne out from the material on record, that the place of recipient of the services provided by the petitioner is in USA, which is outside the territory of India and in a non-taxable territory and consequently, by virtue of the aforesaid notification, the petitioner could not have been saddled with the liability to pay GST.

6. Insofar as the findings recorded by the respondents that the said notification is prospective and not retrospective in its nature, application and operation is concerned, it is pertinent to note that at the 37^th GST Council Meeting conducted/held on 20.09.2019, Item No. 5, which came up for consideration/discussion, was in relation to a request for clarification on GST related export of services with the pharmaceutical sector