TOP NEWS
GSTR-3B - Govt finally extends due date till October 25
Availment of ITC for last FY - Oct 20 remains last date, clarifies Govt
GST AAAR CASES
2018-TIOL-20-AAAR-GST
Caltech Polymers Pvt Ltd
GST - In response to an application preferred by the Applicant,the Authority for Advance Ruling 2018-TIOL-01-AAR-GST held that recovery of food expenses from employees for the canteen service provided by the company comes under the definition of ‘outward supplies' and are taxable under the CGST Act - Aggrieved, appeal filed before the Appellate Authority for Advance Ruling.
Held: Appellant company has admitted that they are serving food to the employees for cash, though there is no profit involved in the transaction - In spite of the absence of any profit, the activity of supplying food and charging price for the same from the employees would surely come within the definition of "supply" as provided in Section 7(1)(a) of the CGST Act, 2017 -Consequently, appellant would come under the definition of "supplier" as provided in section 2(105) of CGST Act, 2017 and moreover since the appellant recovers the cost of the food items from employees, there is "consideration" as defined in s.2(31) of the Act - Telangana High Court decision in the Bhimas Hotels case 2017-TIOL-779-HC-AP-ST pertains to the erstwhile Service Tax law when Service Tax and Value Added Tax stood on separate and independent footing - in that case the facts were that the food provided to the employees was already taxed under the erstwhile Value Added Tax and thereby the High Court held that the same could not be subjected to Service Tax being double taxation - since there is no possibility of such double taxation in the GST regime, the Bhimas Hotels case cannot be considered to be in pari materia with the instant case - no reason to deviate from the findings and decision of the Authority for Advance Ruling - Supply of food items to employees for consideration in canteen run by the appellant company would come under the definition of "supply " and be taxable under GST - Appeal dismissed: AAAR
- Appeal dismissed: AAAR
2018-TIOL-19-AAAR-GST
Ramachandran Bror
GST - Applicant had preferred an application seeking advance ruling on the rate of tax of the commodity "Ada" (prepared from rice flour or maida and used to make sweet kheer or palada payasam or ada pradhaman) - since the members of the Advance Ruling Authority had differed on the question of classification, the matter was referred to the Appellate authority - Member, CGST had viewed that the commodity is classifiable under HSN 1902 of Schedule I (Sl. No. 97, Seviyan (Vermicelli) of Notification 01/2017-CTR @5% GST whereas Member, SGST held that it would be taxable under residual entry at Sl. No. 453 of Schedule III of Notification 1/2017-CTR @18% GST.
Held: Product "Ada" in sum and substance is something akin in character to Vermicelli; both are made from 'maida and/or rice flour' and are manufactured using identical process - there is nothing to differentiate "Ada" from "Vermicelli" except for the dies that are used in the manufacturing process which gives it a different shape - Applying rule 4 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Act, 1975 and the principles of classification of goods as settled by various judgments of the Apex court, "Ada" is rightly classifiable under HSN 1902 of the Schedule I, Sl. No. 97 - Seviyan (Vermicelli) of Notification 1/2017-CTR @5% GST: AAAR
- Matter disposed of: AAAR
GST AAR CASES
2018-TIOL-231-AAR-GST
Gowra Ventures Pvt Ltd
GST - Applicant is carrying on real estate development activity and owns a parcel of land which the company intends to develop and construct a multi-storeyed building - the owners of the adjoining land, who are also Directors in the applicant company, also intend to develop the said land by constructing a multi-storeyed building and hence approached the applicant for construction services - Applicant seeks a ruling as to whether the pooling of land by way of amalgamation of the separate parcels would constitute a supply under the CGST, whether the construction activity undertaken by the applicant would be treated as supply of service; whether the recovery of construction cost by the company from the ‘partners' would be transaction value for the purpose of section 15 of the CGST/rule 30 of the CGST Rules; whether vesting of the constructed portion upon the ‘partners' would independently constitute a supply besides the supply on account of recovery of construction cost.
Held:
+ The pooling of land by way of amalgamation of the separate parcels viz. Land 1 and Land 2 would not constitute a supply under the CGST/TGST Act, 2017.
+ The activity undertaken by applicant with respect to the share belonging to the partners is a supply of service under the CGST/TGST Act, 2017.
+ The applicant is providing service to owners who are related persons and, therefore, the value of the construction service supplied by applicant shall be 110% of the cost of provision of the said service.
+ The vesting of the constructed portion upon the partners cannot be treated as an independent supply as neither any service nor any consideration has been received by owner for vesting of constructed portion to the partners.
- Application disposed of: AAR
2018-TIOL-230-AAR-GST
Sanghvi Movers Ltd
GST - Applicant is engaged in the business of providing medium-sized heavy-duty cranes on rental/lease/hire basis to its customers without transferring the right to use the cranes - Applicant seeks a ruling as to whether the movement of Tyre mounted cranes or crawler cranes from one GST registered office of applicant to another registered office of applicant for further supply on hire charges to customers would be treated as "taxable supply" or not as per the clarification issued by CBIC vide Circular 21/21/2017-CGST read with Circular 1/1/2017-IGST; and if GST is payable, whether the same can be availed as Input Tax credit; whether such movement only for the upkeepment and maintenance purpose without any further supply to unrelated customers would also attract tax and what would be the taxable value.
Held: Since Interstate movement of goods from applicant's HO in Maharashtra to applicant's branches in other states is for further supply of goods on hire, same is a "taxable supply" , GST is payable - as for entitlement of ITC, applicant is not the proper person to raise this question - insofar as movement of such goods to applicant's another office for upkeep/maintenance, no tax is payable since as per Circular 21/21/2017-GST, same would neither be a supply of goods or supply of service, however, tax is leviable on repairs and maintenance done on such goods - value for purpose of discharge of tax would be the value declared in the invoice as open market value of the services - there is no impropriety in the appellant considering 95% of the value charged by applicant's branches to the customer as value for discharging GST liability: AAR
- Application disposed of: AAR
2018-TIOL-229-AAR-GST
North American Coal Corporation India Pvt Ltd
GST - Applicant carries on the business of providing technical consultancy relating to coal mining and related activities - they seek a ruling as to whether liquidated damages that may be awarded to them by the International Chamber of Commerce qualifies as a “supply” and attracts GST and if so, what would be time of supply i.e the point of time in which the applicant's liability to pay GST arises and the value therefor.
Held: Consideration that may be awarded to the applicant by the ICC would qualify as a ‘supply' of service as per section 5(e) of Schedule II of Section 7(1) of the CGST Act - time of supply would be determined as per section 13 of the Act after the award of arbitration proceedings is given by the Arbitration Tribunal as administered by the ICC as per the Association Agreement by the parties to dispute - the value of the supply would be the actual amount of damages received by the applicant: AAR
- Application disposed of: AAR
2018-TIOL-228-AAR-GST
Mukand Ltd
GST - Applicant seeks a ruling as to whether “Electric Overhead Traveling Grab Crane (EOT Grab Crane) to be supplied to the buyer for use in the waste-to-energy product is covered under Sl. No. 234 of Schedule I of Notification 1/2017-ITR as "Renewable energy devices and parts for the manufacture of waste to energy plants/devices" attracting 5% levy.
Held: Dictionary meaning of the term EOT Grab Crane indicates it is a device - From the purchase order, details of commercial terms and conditions and technical specifications and scope of supply and services, the details of map, drawing, designs of Waste to Energy Products etc. , it is apparent that the EOT Grab Crane is an integral device cum part of waste to energy plant and, therefore, clearly falls under Serial no. 234 of Schedule I of Notification 1/2017-ITR and liable to IGST @5%: AAR
- Application disposed of: AAR
2018-TIOL-227-AAR-GST
Monrovia Leasing And Finance Pvt Ltd
GST - Applicant seeks a ruling as to whether the whole (sheep/goat) animal carcass in its normal shape in frozen state in different weights and size and packed in LDPE bags without mentioning the weight and one or two such LDPE bags further packed in HDPE bags being supplied to Armu by applicant against tender shall qualify as product put up in "unit container" and whether they are taxable under GST as per Entry no. 4 of Schedule II of Notification 1/2017-ITR up to 14 November 2017 and thereafter under Entry no. 1 of Schedule I of Notification 43/2017-ITR or fall under exemption list Entry no.10 of Notification 2/2017-ITR upto 14 November 2017 and thereafter as per Entry no. 9 of Notification 44/2017-ITR.
Held: Dor a package to be called a "unit container" , it has to satisfy the following conditions simultaneously viz. package may be large or small; package should be designed to hold pre-determined quantity or number and such pre-determined quantity or number is indicated on such package - since as per the submission of the applicant, each package is containing different weights and no weight/number is mentioned on packages, such supplies do not qualify as product put in "unit container" for the purpose of the notifications cited by the applicant - The period relevant to the present application, as stated by the applicant, is from 1 st April 2018 till present and continuing period - the impugned products would, therefore, be covered by notification 2/2017-ITR as amended by serial no. 9 of notification 44/2017-ITR dated 14 November 2017 and would be exempt from whole of GST: AAR
- Application disposed of: AAR
2018-TIOL-226-AAR-GST
HP India Sales Pvt Ltd
GST - Applicant supplies Indigo Press printing ink (Electro Ink) bundled along with supply of ancillaries comprising of oil, binary ink developer, bip, blanket, print imaging plate and other machine products - Applicant seeks a ruling on the classification of ink supplied along with consumables and determination of the time and value of supply of printing ink with consumables under the Indigo Press contract.
Held: Supply of Electro Ink along with consumables is a mixed supply as defined u/s 2(74) of the GST Act and is also a continuous supply of goods as defined in section 2(32) of the Act - Time of supply of Electro Ink along with consumables under indigo press contract would be the earliest date between the date of invoice or the date of receipt of payment - as regards value of supply of Electro Ink and consumables, the same would be the transaction value as reflected in the invoice issued u/s 31(4) of the GST Act: AAR
- Application disposed of: AAR
2018-TIOL-225-AAR-GST
AS Moloobhoy Pvt Ltd
GST - Applicant is engaged in the business of sale and distribution of Marine Distress Signals, EPIRB and SART, SSAS, Marine Chemicals, Navigation and Communication (NAVCOM) Equipment and also providing life saving services such as Life Raft, Life Boat and fire-fighting services, including Pyrotechnic Disposal, Electronic Services and Training Services related to the Marine Industry - Applicant seeks a ruling as to whether the supply of the goods is classifiable as Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 under Entry no. 252 of Schedule I of GST Notification 1/2017-CTR as amended and liable to GST @5% or IGST @5%.
Held: Classification of goods under Sr. no. 252 depends solely on the nature of use to which the goods are put to - Items listed at Sr. nos. A, B, C, D, E, G, H, I, J, K, M and S are essential parts of a ship/vessel without which the ship would not be complete and would not exist - since these are very integral for the functioning of the ship, out of the 504 items mentioned by the applicant, only those goods used in the equipments mentioned above can be considered as parts of a ship and, therefore, be eligible to concessional rate of GST - Parts which are used in equipments mentioned against Sr. nos. F, L, N, O, P, R, T, U, V will not be eligible for concessional rate of duty since the said equipments cannot be considered as essential parts of a ship: AAR
- Application disposed of: AAR
GST - AUDIT GUIDELINES
Technical Guide on Annual Return-&-GST-Audit 17-10-18
ARTICLES
GSTR-3B vs GSTR-3 - North Block missing the Wood for the Tree!
Supply of goods or supply of services - Changing perceptions
Treading GST Path - 51- All about 'OIDAR'
