2021-TIOL-1511-HC-MAD-GST

Chemplast Sanmar Ltd Vs Addl. CGST & CE

GST - The petitioner has forwarded a memo under cover of e-mail seeking permission to withdraw this Writ Petition - Recording the said memo, petition is dismissed as withdrawn - Liberty is granted to petitioner to put forth its submissions in regard to preliminary question of assumption of jurisdiction by Assessing Officer: HC

- Writ petition dismissed: MADRAS HIGH COURT

2021-TIOL-162-AAR-GST

CC Fabs

GST - Applicant has sought a ruling on the question as to  Whether the activity of tanker body building on job work basis, on the chassis supplied by the customer, is supply of goods or supply of service; its classification and the applicable rate of GST.

Held: In the instant case the applicant is building body of tankers on the chassis supplied by the customer as per specifications of the customer - The applicant is collecting the charges for the activity which includes the cost of inputs / material used by the applicant and the labour charges for fabrication of the body - Thus it is evident that the applicant is fabricating body on the chassis belonging to the customer - The ownership of the chassis remains with the customer and at no stage of the process of fabrication of the body, the title in the chassis is transferred to the applicant - Therefore, the applicant is fabricating the body on the chassis belonging to another person and hence the activity is squarely covered under Para 3 of Schedule II of the CGST Act, 2017 as a treatment or process which is applied to another person's goods and accordingly is a supply of services - Activity of the applicant is appropriately classifiable under Service Accounting Code 998881; is liable to GST at the rate of 18% as per entry at Sl. No. 26 (iv) - 9988 of Notification No. 11/2017 Central Tax (Rate) : AAR

- Application disposed of: AAR

2021-TIOL-161-AAR-GST

BG Shirke Constructions Technology Pvt Ltd

GST - Applicant is undertaking works contract of construction of residential colony for the staff and employees of Airport Authority of India (AAI) at Devanahalli, Near Kempegowda International Airport, Bengaluru -  The Airport Authority of India being recipient of service fulfils the parameters as mentioned in the Notification No.31/2017-CT(R) vide paragraph (iii) item number (ix) as "Governmental Authority” - The said activity of the construction of residential colony for the staff and employees of Airport Authority of India at Devanahalli, Near Kempegowda International Airport is covered under article 243 W of the Constitution -  Proposed construction of residential colony or residential complex service given by the applicant to Airport Authority of India as a government authority and predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017 as covered under Serial No. 3 (vi)(c) of the Notification No.11/2017-CTR is liable to tax at 6% each under CGST as well as 6% under KGST Act: AAR

- Application disposed of: AAR

2021-TIOL-160-AAR-GST

Abbott Healthcare Pvt Ltd

GST - Applicant has sought a ruling as to w hether the placement of specified medical instruments to unrelated customers like hospitals, labs etc for their use without any consideration for a specific period constitute a "supply" or whether it constitutes movement of goods otherwise than by way of supply as per provisions of the CGST / SGST Act? - AAR has by its order dated 26 September 2018 had held that  such supply constitutes "composite supply", the principal supply is the transfer of right to use of any goods for any purpose and is liable to GST under Sl. No. 17(iii), Heading 9973 [Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other consideration] of Notification 11/2017-CTR - AAAR had upheld this ruling by the AAR by its order dated 14 December 2018 - Kerala High Court by its order dated 7th January 2020 remitted the matter to the AAR for a fresh decision in the matter and accordingly matter heard on 28.10.2020 by virtual mode.

Held:

+ The net issue to be determined is whether the transaction / activity is made for a consideration. [para 13.5]

+ The applicant is placing the instruments / machines at the premises of the hospitals/labs for a specified period for their use on the basis of the agreement. [para 13.7]

+ On a plain reading of the preamble of the Agreement itself it is evident that the primary motivation for the applicant to enter into the Agreement to place the instrument at the premises of the customer is the agreement of the customer to purchase Products as defined in the Annexure B of the Agreement in accordance with the terms and conditions specified in the Agreement. The terms and conditions are specified in clauses 3.1 and 3.2 of the Agreement. According to the above clauses, the customer shall purchase the product exclusively from the applicant at the prices specified in Annexure B for a value not less than that as mentioned in Annexure A. In case of the monthly purchase falling short of the value agreed, the applicant has the right to raise debit note equal to the deficit amount. [para 13.8]

+ The definition of the term consideration under the CGST Act clearly encompasses the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both. Hence the agreement of the customer to purchase the reagents, calibrators and disposables for use in the instrument exclusively from the applicant for a minimum value every month with obligation to pay the deficit amount in case the purchase in a month falls short of the minimum agreed value constitutes a valid consideration as defined under Section 2 (31) of the CGST Act, 2017 . Therefore, there is no doubt that the transaction/activity is made for a consideration. In the light of the discussion above, it is evident that the transaction / activity satisfies all the essential ingredients of supply as defined under Section 7 of the CGST Act, 2017. [para 13.9]

+ It is settled position of law that where the language of the statute is plain and unambiguous, there does not arise a need for interpretation. In the instant case, the term "consideration" is defined clearly and unambiguously in Section 2(31) of the CGST Act, 2017 and there is no need for recourse to any construction interpretation to understand the meaning of the term. The meaning of the term consideration is clear from the plain language used in the definition. Hence there is no need for reference to the definition of consideration under Australian Law or the advisories issued thereunder. It is well settled by a catena of decisions of the Apex Court that a taxing statute must be interpreted in the light of what is clearly expressed; it cannot imply anything, which is not expressed, it cannot import provisions in the statute so as to supply any assumed deficiency. [para 15]

+ It is further stated in the agreement that the applicant owns all rights, title and interest in the instruments and that the customer has no right, title or interest in the instruments other than the right to use the instruments as specified in the agreement. Therefore, the placement of the instruments by the applicant at the premises of the customer qualifies to be categorized as supply of services. Thus it is evident that the activity / transaction undertaken by the applicant constitute supply of services as per the CGST Act, 2017. [para 17] 

+ It is concluded that the placement of specified medical instruments to unrelated customers like Hospitals, labs etc for their use by the applicant constitutes supply of services as defined under s.7 of the CGST Act, 2017. [para 18]

- Application disposed of: AAR

2021-TIOL-159-AAR-GST

Aadhya Gold Pvt Ltd

GST -  Applicant has sought a ruling as to whether GST is to be paid only on the difference between the selling price and purchase price as stipulated under Rule 32(5) of CGST Rules, 2017, if applicant purchases used/ second hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form / nature of goods?

Held:   Rule 32(5) of the Rules, 2017 stipulates the method of working of the taxable value of a supply (of second hand goods) and is applicable if the following conditions are satisfied viz.  The supply made by the supplier must be a taxable supply and t he supplier shall be a person dealing in buying and selling of second-hand goods - In the instant case, the supplier, i.e., the applicant is effecting the supply of second-hand jewellery which is taxable under the GST Act as it is covered under entry no.13 of Schedule V to the Notification No. 01/2017-Central Tax (Rate) which is taxable at 1.5% under the CGST Act and similarly taxable under the KGST Act, 2017 also at 1.5% - Hence, the supplier satisfies the condition that the supply made by him must be a taxable supply - Regarding the next condition, it is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them - The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplied 'as such' - The applicant has stated that he is not melting the jewellery to convert it into bullion and then remaking it into new jewellery but only cleaning the old jewellery and polishing it without changing the nature and form of the jewellery so purchased - These goods are then supplied to other persons - Further, they are invoicing the goods as "used gold ornaments”, hence, the  second condition is also satisfied - In view of the applicant satisfying both the aforesaid conditions, the valuation of the supply of second hand jewellery may be made as prescribed in sub-rule (5) of rule 32 of the Rules, 2017 : AAR

- Application disposed of: AAR