Advance Ruling No. and Date : GST-ARA-82/2020-21/8-111 dated 01.12.2022.
Questions before the Maharastra Authority for Advance Ruling [‘MHAAR’], Goods and Service Tax and the answers are -
Question-1:- Whether the pallets, crates and containers (hereinafter referred as “equipment”) leased by CHEP India Private Limited (hereinafter referred to as “CIPL” or “the Applicant”) located and registered in Maharashtra to its other GST registrations located across India (say CIPL Karnataka), would be considered as lease transaction and accordingly taxable as supply of services in terms of Section 7 of the CGST Act and MGST Act?
Answer:- Yes
Question-2:- If the answer to Question 1 is Yes, what is the value on which GST has to be charged i.e. whether it should be lease charges or the value of equipment in terms of Section 15 of the CGST Act and MGST Act read with relevant Rules?
Answer:- As per the discussion made above.
Question-3:- What are the documents that should accompany the movement of the goods from CIPL, Maharashtra to CIPL, Karnataka?
Answer:- Not admitted.
Question-4:- Whether movement of leased equipment from CIPL, Karnataka to CIPL, Tamil Nadu on the instruction of CIPL, Maharashtra can be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act and MGST Act, and thereby not liable to GST?
Answer:- Not answered in view of discussion made above.
Question-5:- With reference to Question 4 above, what are the documents that should accompany the movement of the goods from CIPL, Karnataka to CIPL, Tamil Nadu?
Answer:- Not admitted.
MHAAAR: The goods in movement is a consequence of the lease contract between the CIPL, Maharashtra and CIPL, Tamil Nadu which is a supply by CIPL, Maharashtra. The transaction is nothing but the combination of the transactions of returning back the goods on lease by CIPL, Karnataka to CIPL, Maharashtra and again sending the same goods on a new lease contract by CIPL, Maharashtra to CIPL, Tamil Nadu. Thus, it cannot be said that the goods are moving not as a result of supply under Section 7 of the CGST Act, 2017. It cannot be termed as a mere movement without any involvement of supply and the said transaction of supply of goods on rental or lease basis by CIPL, Maharashtra to CIPL, Tamil Nadu is liable to tax in the hands of CIPL, Maharashtra as the transaction is between CIPL, Maharashtra and CIPL, Tamil Nadu. Further, the services provided by CIPL, Karnataka to CIPL, Maharashtra in facilitating the transportation of goods to CIPL, Tamil Nadu are exigible to GST.
Held: We. hereby, modify the advance ruling pronounced by the MAAR, and hold as under in respect of the question no. (2). (3). (4) and (5):
Question 2 - If the answer to Question 1 is Yes, what is the value on which GST has to be charged i.e. whether it should be lease charges or the value of equipment in terms of Section 15 of the CGST Act and MGST Act read with relevant Rules?
Answer: The value declared in the invoice issued by the appellant would be the value on which GST has to be charged in terms of Section 15 of the CGST Act, 2017 read with second proviso to Rule 28 of the CGST Rules. 2017.
Question 3 - What are the documents that should accompany the movement of the goods from CIPL Maharashtra to CIPL Karnataka?
Answer: The aforesaid question cannot be answered as the same is not covered within the ambit of advance ruling in terms of section 97 of the CGST Act, 2017.
Question 4 - Whether movement of equipment from CIPL Karnataka to CIPL Tamil Nadu on the instruction of CIPL Maharashtra can be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act and MGST Act. and thereby not liable to GST?
Answer: Movement of equipment from CIPL Karnataka to CIPL Tamil Nadu on the instruction of CIPL Maharashtra cannot be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act, 2017 as the said transaction would fall under the ambit of supply of services in terms of section 7 of the CGST Act. 2017. The said supply of services involved in the transaction under question is being provided by CIPL Karnataka to CLPL Maharashtra in the capacity of bailee of CIPL Maharashtra for which CIPL Karnataka is charging facilitation fee along with applicable GST from the Appellant, i.e., CIPL Maharashtra as per the Inter-unit Memorandum of Understanding entered between the Appellant and other state units. It is further clarified here that the said movement of goods from CIPL Karnataka to CIPL Tamil Nadu as per the instruction received from CIPL Maharashtra, the owner of goods, will again be treated as supply of lease rental services by CIPL Maharashtra to CIPL Tamil Nadu as ruled by the MAAR.
Question 5 - With reference to Question 4 above, what are the documents that should accompany the movement of the goods from CIPL Karnataka to CIPL Tamil Nadu?
Answer: The aforesaid question cannot be answered as the same is not covered within the ambit of advance ruling in terms of Section 97 of the CGST Act 2017. |