Judgement >> AAAR

Advance Ruling No. and Date : GST-ARA-41/2017-18/B-48, dated 14.06.2018.

Questions before the Maharastra Authority for Advance Ruling [‘MHAAR’], Goods and Service Tax and ruling:

Question 1:- Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?

Answer: - Answered in affirmative.

Question 2:- Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?

Answer: - Answered in affirmative provided that aggregate turnover in a financial year exceeds limit prescribed u/s 22 of the GST Act.

Question 3;- Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Maharashtra Goods and Service Tax Act

Answer: - Answered in affirmative.

Question 4:- Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST?

Answer:- Answered in affirmative.

Held: We do not find any reason to interfere with the order of the Advance Ruling Authority in this matter.

Advance Ruling No. and Date : 23/WBAAR/2018-19 dated 26.11.2018

Questions before the West Bengal Authority for Advance Ruling [‘WBAAR’], Goods and Service Tax: 

whether the activities that are undertaken by them maybe termed as “business” and “supply of services” as defined under the WBGST/CGST Act, 2017 ? 

West Bengal Authority for Advance Ruling has ruled as: 

The Applicant’s activities involve supply of services classifiable under SAC Heading 99959 against consideration received in the form of subscription and membership fees.

Services classifiable under SAC Heading 99836 are also supplied.

Sale of souvenirs is to be considered as a supply of goods.

The nature of supply for miscellaneous income as recorded in the Financial Accounts is to be determined by the nature of the supply.

West Bengal AAAR Held: We find no infirmity in the ruling pronounced by the West Bengal Authority for Advance Ruling.

The appeal thus fails and stands disposed of accordingly.

Advance Ruling No. and Date : KER/13/2018 dated 19.09.2018

Questions before the Kerala Authority for Advance Ruling [‘KAAR’], Goods and Service Tax which were ruled as: 

i) Whether computers, laptops etc., used by the applicant for providing output service would qualify as inputs for the purpose of availing transitional ITC under Section 140(3) of KSGST Act?

ii) If the goods are physically available as closing stock as on 30th June, 2017, can the applicant avail ITC for the VAT paid?

the Advance Ruling Authority ruled that;

i) The computers, laptops etc., used by the applicant for providing output service would not qualify as inputs for the purpose of availing transitional ITC under Section / 140(3) of KSGST Act, 2017;

ii) The goods even though physically available as closing stock as on 30th June, 2017, ITC is not eligible for the VAT paid.

Kerala AAAR: The appellant being a service provider, had no tax liability under the erstwhile KVAT Act, and thereby was not eligible to avail input tax credit on computers and laptops held during the transition period. Hence the transitional input tax credit claim of the Taxpayer in respect of capital goods is not admissible as per the transitional provisions of the KSGST Act, 2017.

Held: The computers, laptops etc., used by the appellant for providing output service would not qualify as inputs, though they are physically available as on 30th June, 2017, for the purpose of availing transitional input tax credit of the VAT paid during the pre-GST period, under Section 140 of the KSGST Act, 2017.

Advance Ruling No. and Date : KER/16/2018 dated 19.09.2018

Questions before the Kerala Authority for Advance Ruling [‘KAAR’], Goods and Service Tax which were ruled as: 

Whether the supply of Medicines and allied items through the pharmacy of the hospital run by the applicant attracts liability under GST?

Kerala Authority for Advance Ruling issued the following ruling:

i) The supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of composite supply of health care treatment and hence not separately taxable.

ii) The supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients is taxable.

Kerala AAAR: Appellate Authority for Advance ruling does not find any reason to modify the decision of the Authority for Advance Ruling

Held: The supply of medicines and allied items to the outpatients through the pharmacy attached to the hospital run by the appellant is taxable under GST.

Therefore, the appeal is disallowed.

Advance Ruling No. and Date : KER/15/2018 dated 26.09.2018

Questions before the Kerala Authority for Advance Ruling [‘KAAR’], Goods and Service Tax which were ruled as: 

i) Whether the placement of specified medical instruments to unrelated customers like hospitals. labs etc, for their use without any consideration, for a specific period constitute supply?

ii) Whether such movement of goods constitutes otherwise than by way of supply under GST?

Kerala Authority for Advance Ruling issued the following ruling:

The placement of specified medical instruments to unrelated customers like hospitals, labs etc. for their use without any consideration, against an agreement containing minimum purchase obligation of products like reagents, calibrators, disposals etc for a specific period constitute 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 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.

Kerala AAAR: We are of the opinion that the ruling of the original authority that the placement of the specified medical instruments in the instant case constitutes a composite supply is legally correct and proper.

Held: We hereby uphold the original order as legally correct and proper and rule that the placement of specified medical instruments to unrelated customers like hospitals, labs etc., for their use without any consideration, against an agreement containing minimum purchase obligation of products like reagents, calibrators, disposals etc., for a specific period constitute composite supply, the principal supply being the transfer of right to use any goods for any purpose is liable to GST under Sl. No. 17 (iii)-Heading 9973 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Advance Ruling No. and Date : KAR ADRG 15/2018 dated: 27.07.2018

Questions before the Karnataka Authority for Advance Ruling [‘KTAAR’], Goods and Service Tax :

“Whether the activities performed by the employees at the corporate office in the course of or in relation to employment such as accounting, other administrative and IT system maintenance for the units located in the other states as well i.e. distinct persons as per Section 25(4) of the Central Goods and Services Tax Act, 2017 (CGST Act) shall be treated as supply as per Entry 2 of Schedule I of the CGST Act or it shall not be treated as supply of services as per Entry 1 of Schedule III of the CGST Act?”.

Karnataka Authority for Advance Ruling has ruled as follows: 

The activities performed by the employees at the corporate office in the course of or in relation to employment such as accounting, other administrative and IT system maintenance for the units located in the other states as well i.e. distinct persons as per Section 25(4) of the Central Goods and Services Tax Act, 2017 (CGST Act) shall be treated as supply as per Entry 2 of Schedule I of the CGST Act.

Karnataka AAAR: The taxable event under the Service Tax law and under GST are vastly different and hence the ratio of decisions rendered in the light of the taxable event under Service Tax provisions cannot be applied to the transactions under GST regime.

Held: We uphold the Ruling dated 27.07.2018 passed by the Karnataka Authority for Advance Ruling as under:

The India Management Office (IMO) of the Appellant is providing a service to its other distinct units by way of carrying out activities such as accounting, administrative work, etc with the use of the services of the employee working in the IMO, the outcome of which benefits all the other units and such activity is to be treated as a taxable supply in terms of the entry 2 of Schedule I read with Section 7 of the CGST Act.

Input credit is not admissible for GST paid on freight for transporting Petro products to export warehouse

Advance Ruling No. and Date : GST-ARA-30/2017-18/B-38, dated 23.05.2018.

Questions before the Maharastra Authority for Advance Ruling [‘MHAAR’], Goods and Service Tax and ruling:

Question 1. Whether Exemption provided in serial no. 54 to Notification No, 12/2017 Central Tax (Rate) is applicable to the activity carried by the company ?

Answer :- Answered in the negative.

Maharastra AAAR: We come to the question asked in the advance ruling application filed by the them i.e. “Whether the supply of warehouse services used for packing & storage of tea, under above mentioned facts & circumstances was/is exempted vide Serial No 54(e) of Notification No. 12/2017- Central tax (rate) or otherwise.”. The answer to this question will be negative as the said exemption granted vide the above notification is provided to the storage and warehousing services when provided in relation to the agricultural produce.

Held: We do not find any reason to interfere with the ruling given by Authority for Advance Ruling No. GST-ARA-30/2017-18/B-38, dated 23.05.2018.

Advance Ruling No. and Date : RAJ/AAR/2018-19/09 dated 01.08.2018

Questions before the Rajasthan Authority for Advance Ruling [‘RJAAR’], Goods and Service Tax:

Whether the power cables supplied by the Applicant would be covered under the scope of SI. No. 1 of Notification No. 03/2017-CT?

Rajasthan Authority for Advance Ruling rules as below: 

Hence under the facts and circumstances of the case discussed above “Electrical Cables” do not fall under Entry no. 24 of list as ‘material’, ‘accessories’, ‘consumables’, and/or ‘stores’ of SI. No. 1 of Notification No. 03/2017-central Tax (Rate) dated 28.06.2017.

Rajasthan AAAR: If the lower forum i.e. AAR has committed any error, this forum is not bound to carry the burden of that error. AAAR is an independent forum. Needless to mention that this body (AAAR) is at a higher pedestal than that of AAR and so it has all the powers to modify the ruling of the AAR the way it deems fit. If the AAR has entertained and pronounced its ruling on any issue which was outside the scope of the Advance Ruling, this forum (AAAR) has every power to undo the job done by the AAR while disposing appeal, and this job can be done by the AAAR even if neither of the Party (i.e Appellant or Department) pleaded for the same during the proceedings of the appeal filed before it.

Held: As the question posed by the Appellant is related to supplies undertaken by them prior to the date of filing of the application for advance ruling, no ruling can be given on the question.

Advance Ruling No. and Date : KAR ADRG 14/2018 dated: 27.07.2018

Questions before the Karnataka Authority for Advance Ruling [‘KTAAR’], Goods and Service Tax :

Whether the money paid by the customer to the driver of the cab for the services of the trip is liable to GST and whether the applicant company is liable to pay GST on this amount ? 

Karnataka Authority for Advance Ruling ruled as follows: 

The applicant is liable to tax on the amounts billed by him on behalf of the taxi operators for the service provided in the nature of transportation of passengers through it, in accordance with the provisions of sub-section (5) of section 9 of the Central Goods and Services Tax Act 2017 read with Notification No. 17/2017 –Central Tax (Rate) dated 28.06.2017 and the provisions of sub-section (5) of section 9 of the Karnataka Goods and Services Tax Act 2017 read with Notification No. 17/2017 –State Tax (Rate) dated 28.06.2017.

Karnataka AAAR: The electronic commerce operator shall be liable to pay tax on the services provided by a motor cab or maxi cab or motor cycle or radio-taxi, by way of transportation of passengers, if such services are supplied through it and it shall be deemed that the electronic commerce operator is the supplier in such cases.

Held: We uphold the order No. KAR ADRG 14/2018 dated: 27.07.2018 passed by the Advance Ruling Authority and appeal filed by the appellant M/s. OPTA Cabs Private Limited, stands dismissed on all accounts.