2018-TIOL-13-AAR-GST

Deepak And Company

Supply of food at railway platform stalls, in mail/express trains does not have an element of service – to be considered as supply of goods: AAR

Supply of food on board Rajdhani/Duronto trains – service charges covered under Service Code (Tariff) 996335 as "catering services in train" - not covered under S. No. 7 (i) of Notfn. 11/2017-CT(R) , 8/2017-IT(R) since a train is a mode of transport and hence cannot be called as a restaurant, eating joint, mess or canteen etc. – Taxable at ratesunder S. No. 7(ix): AAR

Supply of newspaper at platforms/in mail/express/Rajdhani/Duronto trains – Tax at 'Nil" GST under S. No. 120 of Notification No. 2/2017-CT(R) and parallel Notifications of IGST and Delhi GST: AAR

Questions before the AAR for which Advance Ruling is sought:

(I) What is the applicable rate of tax on the activity of applicant of supplying food/beverages in each of following mentioned cases – pursuant to the amendments made in notification 11/2017-CT(R) dt. 28.06.2017 by 46/2017-CT(R) and 8/2017-IGST(R) dt. 28.06.2017 by 48/2017-IGST(R) dt. 14.11.2017 and parallel Notifications of IGST and Delhi GST?

A) Supply of food through the food plaza (with A/C) on the railway platform /food stalls (without A/C) on the Railway platform:

++ For the supply of food (Cooked/ MRP/ Packed) in food plaza, the relevant document pertaining to details of items supplied, pricing detains, extent of services provided are not submitted. Hence, no ruling can be given in respect of supply from Food Plaza on the Railway Platform.

++ The supply of food and beverages (cooked/ MRP/ packed) by the applicant to the passengers/ general public at the rates fixed by the Indian Railways/ IRCTC at food stalls at Railway platforms does not have any element of service and hence the same shall be considered as pure supply of goods and GST shall be charged on individual items at their respective applicable rates. The mere heating/ cooling of beverages or similar other services are incidental and minimal required to supply of goods and such supply cannot be called composite supply.

++ The benefit of S. No. 7 of Notification No. 11/2017-CT(R) [as amended by 46/2017-CT(R) dated 14.11.2017]; Notification No. 8/2017-IT(R) [as amended by No. 48/2017-IT(R) dated 14.11.17] and parallel notification of State are not admissible to the applicant.

B) Supply of Food on board the Rajdhani Trains

++ In the case of supply of food and beverages (cooked/ MRP/ packed), and defined in menu and tariff, by the applicant to IRCTC/ passengers on behalf of IRCTC, on board the Rajdhani/ Duronto Express trains, the service charges are covered under Service Code (Tariff) 996335 in Group 99633 of heading 9963 of Annexure/ Scheme of Classification of Services as "catering services in train".

++ The same are covered under S. No. 7(ix) of Notification No. 11/2017- CT(R) dated 28.06.2017 as amended vide Notification No. 46/2017-CT(R) dated 14.11.17 and parallel Notifications of IGST and Delhi GST.

++ A train is a mode of transport and hence cannot be called as a restaurant, eating joint, mess or canteen etc. and hence catering services provided on-board a train are not covered under S. No. 7 (i) of the said Notifications as claimed by the applicant. The supply of goods i.e. food, bottled water etc. shall be charged to GST on value of goods (excluding the service charges) at applicable rates as pure supply of goods, as the same have no element of service.

C) Supply of Food on board the mail/express trains

++ In the case of supply of food and beverages (cooked/ MRP/ packed) on board the Mail/ express trains by the applicant directly to the passengers as per the menu/ rates fixed by IRCTC/ Railways does not have any element of service and hence the same shall be considered as pure supply of goods and GST shall be charged on individual items at their respective applicable rates.

++ The benefit of S. No. 7 of Notification No. 11/2017- CT(R) dat ed 28.06.2017 amended vide Notification No. 46/2017-CT(R) dated 14.11.2017; amendment made in Notification No. 8/2017-IT(R) dated 28.06.2017 amended vide Notification No. 48/2017-IT(R) dated 14.11.17 and parallel notification of State not admissible to the applicant.

(II) What is the applicable rate of tax on supply of newspaper in the above mentioned cases?

++ The supply of newspaper is separately invoiced and hence it shall be at 'Nil" GST under S. No. 120 of Notification No. 2/2017-CT(R) dated 28.06.2017 and parallel Notifications of IGST and Delhi GST. - Application disposed : ADVANCE RULING

2018-TIOL-12-AAR-GST

Giriraj Renewables Pvt Ltd

CGST Act, 2017 - Supply of turnkey Engineering, Procurement and Construction (EPC) contract for construction of Solar Power plant wherein both goods and services are supplied is to be construed as Works Contract and not as Composite Supply – Since transaction is treated as ‘Works Contract' and not as ‘Composite Supply', there would be no relevance of ‘principal supply' – as to whether benefit of concessional rate of 5% of ‘Solar Power generation system and parts thereof' would be available to sub-contractors, since no documents have been produced, Authority is unable to deal with this question: AAR [para 5] . - Application disposed : ADVANCE RULING

2018-TIOL-11-AAR-GST

Acrymold

CGST Act, 2017 – Classification - Trophy - Heading 8306 2920 – Even though the word 'Trophy' is specifically mentioned in the referred heading, all trophies made of any material cannot be classified under this HSN and are to be classified as per the applicable provisions of the Customs Tariff Headings – since a general question is raised as to whether if there is a combination of different materials and about 75% (value terms) is getting used of any one raw material, under which HSN bill should be made, therefore, no decision can be given: AAR [para 6] - Application disposed : ADVANCE RULING

2018-TIOL-10-AAR-GST

National Plasticindustries Ltd

GST - Classification - PVC floor mat is correctly classifiable under Customs Tariff Heading 3918 – Product is described as being a PVC Carpet Mat and, therefore, the impugned product would fall in the Entry no. 104A of Schedule III and attract tax at the rate of 18% (9% each of CGST & SGST): AAR - Application disposed : ADVANCE RULING

2018-TIOL-09-AAR-GST

Kansai Nerolac Paints Ltd

Carried forward KKC in Electronic Credit Ledger cannot be considered as admissible Input credit - AAR

Observations by AAR:

+ Applicant seeks advance ruling on the question – ‘Whether accumulated credit by way of KrishiKalyanCess (KKC) as appearing in the Service Tax return of Input Service Distributor (ISD) on 30.06.2017 which is carried forward in the Electronic Credit ledger maintained by the company under the CGST Act, 2017, will be considered as admissible Input Tax credit?'

+ By express provisions in rule 3 of CCR, 2004 as amended by notification 28/2016-CE(NT) dated 26.05.2016, it was made clear that KKC would be utilized towards payment of KKC only and that the list of items in respect of which CENVAT credit is available would not be utilized for payment of KKC.

+ Under GST law, there is no levy of KKC.

+ In Cellular Operators Association of India, Delhi High Court - 2018-TIOL-310-HC-DEL-ST while dismissing the petition held that it would be improper to treat the two Cesses viz. Education Cess and Secondary and Higher Education Cess as duty of excise or service tax and, therefore, could not be allowed to be cross-utilised against the excise duty or service tax; that what the petitioner seeks is an amendment of the Scheme to allow them to take cross utilization of unutilized EC and SHE (upon the two cesses being withdrawn) towards excise duty and service tax, though this was not the position even earlier.

+ In view of the above, KKC cannot be treated as excise duty or service tax inasmuch as the CENVAT Credit referred to in sub-section (1) of Section 140 of the CGST Act, 2017 would not include the credit in respect of KKC.

+ FAQ brought out by the Board explaining SBC (Swachh Bharat Cess) apply with equal force to KKC and in fact, under the GST Act too, the FAQ issued by CBEC clarifies at point 112 that ITC of Swachh Bharat Cess or KrishiKalyanCess cannot be carried forward under GST.

+ Therefore, the accumulated credit by way of KrishiKalyanCess (KKC) as appearing in the Service Tax return of Input Service Distributor (ISD) on 30 th June 2017 and which has been carried forward in the Electronic Credit Ledger maintained by the Company will not be considered as admissible Input credit.

++ Held accordingly. - Application disposed : ADVANCE RULING

2018-TIOL-08-AAR-GST + See analysis of the Order

Rod Retail Pvt Ltd

GST - Goods cannot be called to be exported, merely on crossing the Customs Frontiers of India - supply of goods to the International passengers going abroad by the applicant from their retail outlet situated in the Security Hold Area of the Terminal-3 of IGI Airport may be taking place beyond Customs Frontiers of India as defined under Section 2(4) of the IGST Act, 2017 - However, the said outlet is not outside India, as claimed by the applicant but the same is within the territory of India as defined under Section 2(56) of the CGST Act, 2017 and Section 2(27) of the Customs Act, 1962 and hence the applicant is not taking goods out of India and hence their supply cannot be called “export” under Section 2(5) of the IGST Act, 2017 or “zero rated supply” under Section 2(23) and Section 16(1) of the IGST Act, 2017 - applicant is required to pay GST at the applicable rates: AAR [para 28 to 36] - Application disposed : ADVANCE RULING

2018-TIOL-07-AAR-GST + See analysis of the Order

Joint Plant Committee

CGST - Applicant, a non-profit organisation is engaged exclusively in supplying goods and services that are wholly exempt from tax, and, therefore, not liable to be registered under the GST Act if he is not otherwise liable to pay tax under reverse charge under section 9(3) of the GST Act: AAR [para 9, 12, 13]

CGST - Main source of the Applicant's income is the interest consideration received by way of interest on services like extending deposits, loans or advances - This service, also, is wholly exempt under Serial no. 27 of the Exemption Notifications for Services (Tariff head: 9971): AAR [para 9] - Application disposed : ADVANCE RULING

2018-TIOL-06-AAR-GST + See analysis of the Order

Global Reach Education Services Pvt Ltd

IGST – Applicant promoting courses of foreign universities among prospective students and receiving consideration in the form of Commission, based on performance in recruiting students, in convertible foreign exchange - Applicant, therefore, represents the University in the territory of India and acts as its recruitment agent - Whatever services the applicant provisions are provided only as a representative of the University and not as an independent service provider - Being an intermediary service provider, the place of the Applicant's supply shall be determined under section 13(8)(b) of the IGST Act and not under section 13(2) of the IGST Act - The place of supply under the above legal framework is the territory of India - As the condition under section 2(6)(iii) of the IGST Act is not satisfied, the Applicant's service to the foreign universities does not qualify as “ Export of Services”, and is, therefore, taxable under the GST Act: AAR [para 12 to 19] - Application disposed : ADVANCE RULING

2018-TIOL-05-AAR-GST

Switching Avo Electro Power Ltd

GST - Applicant, stated to be a supplier of power solutions, including UPS, servo stabiliser, batteries etc. wants a ruling on the classification of the supply when it supplies UPS along with the battery - More specifically, they want a ruling on whether such supplies can be treated as Composite Supply within the meaning of Section 2(30) of the CGST Act, 2017. Held: A standalone UPS and a battery can be separately supplied in retail set up - A person can purchase a standalone UPS and a battery from different vendors - applicant himself admits that he supplies the battery and UPS as separate machines as well as UPS with battery - It is obvious that the UPS and the battery have separate commercial values as goods and should be taxed under the respective tariff heads when supplied separately - If a combination of goods that does not amount to a composite supply is being offered at a single price, such supplies are to be treated as mixed supplies - Supply of UPS and Battery is to be considered as Mixed Supply within the meaning of Section 2(74) of the GST Act, as they are supplied under a single contract at a combined single price: AAR [para 10, 13]

2018-TIOL-04-AAR-GST + See analysis of the Order

Akansha Hair & Skin Care Herbal Unit Pvt Ltd

GST - Twin test method - Medicaments are not defined under the GST Act or in the First Schedule of the Customs Tariff Act, 1975 with which the GST Act has been aligned for the purpose of classification - The methods settled by the apex court for determining whether a product is to be classified as medicaments for fixing the tariff should be followed as the only lawful course - The Apex Court has settled for a twin test method - It means how the product is understood in common parlance and whether the product has been manufactured using ingredients and formula provided in the authoritative textbooks of Ayurveda are the two parameters for such classification - Skin Care preparations viz. Rupam (Pimple Pack) and Pailab (Anti-Crack Cream) are offered for treatment or prevention of specific skin disorders and are, therefore, classifiable as Medicament under heading 3004 of the CTA, 1975 - Preparations listed as Swarnajyoti, Sunayana and Tarumitra-60 have not yet come into existence, and, therefore, no rulings are pronounced on their classification - The remaining products mentioned in the list submitted by the applicant are not offered primarily as medicaments and, therefore, not to be included under heading 3004: AAR [para 20 to 23] - Application disposed : ADVANCE RULING

2018-TIOL-03-AAR-GST + See analysis of the Order

N C Varghese

GST - Applicant is engaged in the purchase and cutting and removal of rubber trees from the plantations of certain PSUs owned by the Government of Kerala and also from private individuals in Kerala - State Farming Corporation is demanding 18% on live rubber trees – Applicant before AAR seeking clarification on classification and rate of tax. Held: As per the definition of goods in Section 2(52) of CGST Act, 2017 ,  ''goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply -  Rubber trees are agreed to be severed before supply and hence, comes under the definition of 'goods' – since standing rubber trees no longer remain as such, they are to be treated ad ‘wood in rough form' – There is no differentiation between Soft wood and hardwood in GST - Rate of tax on rubber wood in the aforesaid transaction is 18% under the HSN 4403: AAR [para 7, 8, 9] - Application disposed : ADVANCE RULING

2018-TIOL-02-AAR-GST + See analysis of the Order

Synthite industries Ltd

GST - Goods are liable to IGST when they are imported into India and the IGST is payable at the time of importation of goods into India: AAR [para 13] GST - Integrated tax on goods imported into India shall be levied and collected at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962 i.e. on the date determined as per provisions of Section 15 of the Customs Act, 1962: AAR [para 10]

GST - Applicant is neither liable to GST on the sale of goods procured from China and directly supplied to USA nor on the sale of goods stored in the warehouse in Netherlands, after being procured from China, to customers, in and around Netherlands, as the goods are not imported into India at any point: AAR [para 13] - Application disposed : ADVANCE RULING

018-TIOL-01-AAR-GST + See analysis of the Order

Caltech Polymers Pvt Ltd

GST - Recovery of food expenses from the employees for the canteen services provided by company is an 'outward supply', hence taxable: AAR [para 12]

GST - Canteen service to employees - There is no similar exemption (notification 25/2012-ST) as existing under the Finance Act, 1994 prevailing under the GST laws: AAR [para 8]

GST – Upon a plain reading of the definition of "business" given in Section 2(17), clauses (a) and (b) of the CGST Act, it could be safely concluded that the supply of food by the applicant to its employees would definitely come under clause (b) of Section 2(17) as a transaction incidental or ancillary to the main business: AAR [para 9]

GST - Even though there is no profit as claimed by the applicant on the supply of food to its employees, there is "supply" as provided in Section 7(1)(a) of the GST Act, 2017. The applicant would definitely come under the definition of "Supplier" as provided in sub-section (105) of Section 2 of the GST Act, 2017: AAR [para 10]

GST - Since the applicant recovers the cost of food from its employees, there is consideration as defined in Section 2(31) of the GST Act, 2017: AAR [para 11] Ruling:

+ Recovery of food expenses from the employees for the canteen services provided by company would come under the definition of 'outward supply' as defined in Section 2(83) of the Act, 2017, and therefore, taxable as a supply of service under GST. [para 12] - Application disposed : ADVANCE RULING