Judgement >> AAAR

Advance Ruling No. and Date : GST-ARA-23/2018-19/B-87, dated 10.08.2018

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

Question :- (i) Whether the “Commission” received by the Applicant in convertible Foreign Exchange for rendering services as an “Intermediary” between an exporter abroad receiving such services and an Indian importer Of an Equipment, is an “export of service” falling under section 2(6) & outside the purview of section 13 (8) (b), attracting zero-rated tax under section 16 (1) (a) of the Integrated Goods and Services Tax Act, 2017?

Answer:-  Answered in the negative.

Question :- (ii) If the answer to the Q (i) is in the negative, whether the impugned supply of service forming an integral part of the cross-border sale/purchase of goods, will be treated as an “intra-state supply” under section 8 (1) of the IGST Act read with section 2(65) of the MGST Act attracting CGST/MGST? And, if so, at what rate?

Answer:- The said supply will be treated as Inter-State supply and not intra state supply and IGST will be levied @ 18%.

Maharastra AAAR: On perusal of the Chapter XVII of the CGST Act, 2017, pertaining to the Advance Ruling, it is seen that there is no statutory provision for admitting such miscellaneous application, whereby it is sought to restore the earlier rectification application for the purpose of re-hearing.

Held: We, hereby, reject the Miscellaneous Application dated 25.09.2020 filed by the Applicant i.e. M/s. Micro Instrument, 15, Shri Kripa Ramakrishna Society, Ram Mandir Road, Kherwadi. Bandra (East), Mumbai- 400051, to restore their Application dated 21.08.2019 seeking Rectification of Mistake in the MAAAR Order No. MAH/AAAR/SS-RJ/26/2018-19 dated 22.03.2019. as the same has already been decided by the erstwhile Appellate Authority vide Order No. MAH/AAAR/SS-RJ/26A/2018-19 dated 11.12.2019 and therefore, the Miscellaneous Application dated 25.09.2020 filed by the Applicant is not legally maintainable, and hence the same is liable to be rejected and we order accordingly.

Advance Ruling No. and Date : KAR ADRG 43/2020 dated: 02.09.2020

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

“Whether Flavoured Milk is taxable at the rate of 5% under Schedule IV of the GST Act?”

Karnataka Authority for Advance Ruling rejected the application as “inadmissible” in terms of the first proviso to Section 98 (2) of the CGST Act, 2017 in as much as an investigation had already been initiated by the Directorate of GST Intelligence, Bangalore Zonal Unit.

Karnataka AAAR: We hold that the appeal filed against the non-admittance of the application for advance ruling is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017.Since the appeal itself is not maintainable, the question of condoning the delay in filing the appeal does not arise.

Held : We Dismiss the Appeal filed by M/s Tirumala Milk Products Pvt Ltd., 4BC 301, The Summit, 3rd Floor, 3rd Main, 4th "B" Cross, Kasturi Nagar East, Ramamurthy Nagar, Bangalore-560016 on the ground that it is not maintainable.

Appeal has been rejected on delay filing

Advance Ruling No. and Date : KER/64/2019 dated October 12, 2019

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

a. Whether the execution of Civil works of the Pazhassi Sagar Small Hydro Electric project as per the above Work Order would fall under Sl No. 3(iii)(b)or 3(vi) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 attracting GST@12%.

b. Since the CGST statutory provisions are pari materia with State GST provisions, whether the rate of SGST is also 6% in terms of Notification SRO 370/2017 dated 30.06.2017 for supplies covered under Work Order 06/CE CCN/2017-18 dated 06.10.2017.

Kerala Authority for Advance Ruling pronouncing the Advance Ruling as follows:

1. No, the rate of 6% under S1. No. 3(iii) or S1. No. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 is not applicable for Works Contract Services supplied by the Applicant to the KSEB as per Work Order No. 06/CE CCN/2017-18 dated 06.10.2017.

2. No, in view of the ruling 1 above

Kerala AAAR: The supply of services viz. execution of the civil works of Pazhassi small hydro electric project covered under Work order No. 06/CEECCN/ 2017-18 dated 06.10.2017 made by the appellant to the Kerala State Electricity Board Ltd are not eligible to concessional rate of CGST @6%provided by the said notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Consequently, the said services shall not be eligible for concessional rate of SGST @6% also in terms of notification No. SRO 370/2017 dated 30.06.2017 since the CGST statutory provisions are pari materia with State GST provisions.

Held: The concessional rate of 6% of CGST and SGST under S1. No. 3(iii) or 3(vi) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 and SRO 370/2017 respectively is not applicable for the Works Contract Services supplied by the appellant to the Kerala State Electricity Board Ltd as per Work Order No. 06/CECCN/2017-18 dated 06.10.2017.

Consequently, the Advance Authority order dated 12.10.2019 of the Kerala Authority for Advance ruling stands upheld.

Advance Ruling No. and Date : AAR No.16/AP/GST/2020 dated 13.05.2020

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

a. Whether reimbursement received towards LIH equipment can be considered as a “supply” as per section 7 of the CGST Act and hence liable to GST?

b. If reimbursement received towards LIH equipment can be considered as supply and liable to GST, what would be the classification and the rate of GST applicable on such supply? Whether the same would be treated as “agreeing to tolerate an act” as per clause 5(e) of schedule II of the CGST Act, 2017 and subject to GST at the rate of 18% or the same would be treated as a composite supply of works contract’ service (as a part of main service under the Contract) and thus, GST can be charged at the rate of 12% equivalent to the GST rate applicable for supply of composite ‘works contract’ services?

The Authority for Advance Ruling Andhra Pradesh in ruling orders in AAR No.16/AP/GST/2020 dated 13.05.2020 held:

a) Reimbursement received towards LIH equipment is considered as a supply as per Section 7 of the CGST Act, 2017 and is liable to GST.

b) The reimbursement received towards LIH equipment is classifiable as ‘Supply of Goods’ in terms of Section-7 of the CGST Act, 2017. Depending upon the nature of actual goods involved in the subject activity, their classification is as per HSN notified for the goods and the Classification Rules made in this regard. Accordingly, the provisions relating to chargeability and levy of GST under the CGST Act and the Rules made there under as applicable to the supply of goods will apply.

Andhra pradesh AAAR: It is clarified beyond doubt that the supply of drilling services and reimbursement of LIH are not composite supplies. Therefore, the rate of GST applicable to supply of drilling services shall not be applicable to all the supplies made under the contract with ONGC, Basing on the nature of actual goods involved in the subject activity, and their HSN classification notified for the goods, the provisions relating to chargeability and levy of GST under the CGST Act and the Rules made there under are applicable to the supply of goods.

Accordingly, the order of the Authority for Advance Ruling, A.P. needs no interference.

Held: The Ruling of Authority for Advance Ruling, A.P. vide Ruling No. 16/AP/GST/2020 dated 13.05.2020, is upheld.

Advance Ruling No. and Date : AAR No.12/AP/GST/2020 dated 05.05.2020

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

Whether the applicant is eligible for exemption under SI.No.13 of Notification No.9/2017 - Integrated Tax (Rate) dated 28.06.2017 in respect of the activity of renting out a residential building to a company for the purpose of long- term residential accommodation?

The Authority for Advance Ruling Andhra Pradesh in its orders in AAR No.12/AP/GST/2020 dated 05.05.2020 held:

a) The classification of service provided by M/s. Lakshmi Tulasi Quality Fuels, is covered under SAC 997212 and hence under entry no.16 of Notification No.8/2017 (Integrated Tax) (Rate), Dated: 28.06.2017, liable to IGST @ 18%.

b) The entry No.13 of Notification No.9/2017 (Integrated Tax) (Rate) Dated 28.06.2017 - “services by way of renting of residential dwelling for use as residence” is not applicable to the present case on hand.

Andhra pradesh AAAR: We have no doubt in our minds that the Lease Property in question is not a “residential dwelling” and has not been “used as residence” by the recipient (the Lessee). We therefore agree with the Ld. AAR, Andhra Pradesh, that the supply under consideration is classifiable under 'Rental or leasing services involving own or leased non-residential property'. Such “Rental or leasing services involving own or leased non-residential property” is classified under the heading (SAC) 997212 under entry no.16 of Notification No.8/2017 Integrated Tax (Rate), Dt: 28.06.2017, and liable to IGST @ 18%. The exemption under SI. No.13 of Notification No.9/2017-IT (Rate) is not available to the Appellant.

Held: The order of the Ld. AAR, Andhra Pradesh vide Order AAR No.12/AP/GST/2020 dated 05.05.2020 is hereby upheld.

Advance Ruling No. and Date : HAR/HAAR/R/2020-21/01 dated 29.10.2020.

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

a. Whether GST is payable on transportation facility provided by the employer (applicant) to its employees for travel between predefined location to its the office, free of cost i.e. without any recovery being made form them. If yes what would be taxable value of the said transaction?

b. Whether GST payable on the recovery of nominal amount on account of air conditioning facility for transportation facility provided by the employer (applicant) to its employees for travel between predefined location. If yes then what would be the taxable value in the said transaction?

Haryana Authority for Advance Ruling has ruled as: 

a. The abovementioned Service is taxable under the provision of the HGST/ CGST/ IGST Acts. For valuation of such services the provisions under Section 15 of the CGST/ HGST Acts are applicable”.

b. “The abovementioned Service is taxable under the provision of the HGST/ CGST/ IGST Acts. For valuation of such services, the provisions under Section 15 of the CGST/ HGST Acts are applicable”.

Haryana AAAR: We find that a gift of the value of Rs.50,000/- given by the employer to an employee during a financial year is not a taxable supply, in terms of Clause 2 of Schedule-I to the GST Acts.

Held: We find that the transactions executed in the course of contractual obligation of an agreement of employment are beyond the scope of GST as clarified in the Press Release dated 10.07.2017, of CBIC.

We hold that provisioning of transport facility provided by the Appellant is exclusive of the contractual obligation of the employer in the course of employment. The same shall be liable to GST, on a value that exceeds the total gift value up to Rs.50000/- given by the Appellant to an employee availing this facility in a financial year.

Advance Ruling No. and Date : GST-ARA-47/2019-20/B-33 dated 17.03.2020

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

Whether threaded metal nuts which function same as standard nuts, merit classification under the Tariff item 7318 16 00 and not under Tariff item 8708 99 00?

The Maharastra Authority for Advance Ruling held :

Threaded metal nuts merits classification under the Tariff item 7318 16 00.

Maharastra AAAR: It has been established beyond doubt that the impugned goods are suitable for use solely or primarily with articles of Chapter Heading Nos. 87.01 to 87.05, and therefore, applying the principle laid down by the Hon’ble Supreme Court in the case of G.S. Auto International Ltd. (Supra), it is manifest that the impugned products will be construed as parts of motor vehicles falling under Chapter Heading 87.01 to 87.05, and will merit consideration under the Tariff Item 8708 9900.

Held :We. hereby. set aside the Advance Ruling No. GST-ARA-47/2019-20/B-33, dated 17.03.2020 pronounced by the MAAR. We further hold that the impugned goods, i.e., Metal Nuts with metrical threading, Metal Nuts without metrical threading, and Metal Spring Nuts, will be considered as parts of motor vehicles falling under Chapter Heading from 87.01 to 87.05, and accordingly will merit classification under the Tariff Item 8708 99 00, as purported by the Appellant. Thus, the subject Appeal filed by the Department is, hereby, allowed.

Advance Ruling No. and Date : GST-ARA-33/2019-20/B-40 dated 18.03.2020

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

Question A :-Whether the classification of ‘Shatamrut Chyavan’ falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST attracting ‘NIL’ rate (0%) of IGST (0%) CGST + (0%) SGST) as per List of Exempted Goods as per Sr. No. 102 of Notification No. 02/2017 - Central Tax (Rate) dated 28.06.2017 is correct or not?

Answer :- Answered in the affirmative.

Question B:- Whether the goods falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST can be treated as ‘waste of sugar manufacture, whether or not in the form of pellets under heading 2303’ attracting 5% of IGST (2.5% CGST + 2.5% SGST) as per Schedule I (Sr. No. 104) of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017 or not?

Answer :- Not answered, in view of discussions made above.

Maharastra AAAR: It has been established that the impugned product is an animal feed having specific use, viz.- increasing the milk production of the cattle and increasing the immunity of the cattle to fight diseases, and the said impugned product is also known in the market as the cattle feed supplement only, therefore, the said impugned product would be classified as animal feed supplement, and accordingly would merit classification under the Chapter Heading 2309 and under the Tariff Item 2309 90 10, and would not attract any GST in terms of Si. No. 102 of the Notification No. 2/2017-C.T. (Rate), dated 28.06.2017.

Held: We uphold the Ruling passed by the MAAR vide Order No. GST-ARA-33/2019-20/B-40, dated 18.03.2020, wherein it was held that the subject product, involved in the application, was rightly classified by the Appellant under chapter heading 2309, attracting ‘NIL’ rate as per Sl. No. 102 of the Notification No. 02/2017 C.T. (Rate), dated 28.6.2017, while in respect of the second question as to whether  the impugned product can be treated as ‘waste of sugar manufacture, whether or not in the form of pellets under heading 2303’ attracting 5% of IGST (2.5% CGST + 2.5% SGST) as per Schedule I (Sl. No. 104) to the Notification No. 01/2017 - Central Tax (Rate), dated 28.06.2017, it was held by the MAAR that the said question would not come under the purview of the Advance Ruling in terms of Section 97(2) of the CGST Act, 2017, and therefore, is not liable to be answered. Thus, the appeal filed by the Appellant is, hereby, dismissed.

Advance Ruling No. and Date : Order No. 13/2020 dated 23.07.2020

Questions before the Madhya Pradesh Authority for Advance Ruling [‘MPAAR’], Goods and Service Tax as:

Whether Input tax credit on the Demo vehicle purchased can be availed as the same will he capitalized in books.

Madhya Pradesh Authority for Advance Ruling [‘MPAAR’], Goods and Service Tax passed the Ruling as:

Considering the Arguments and submissions made by the Applicant in respect of the Question raised before this authority. it is ruled that the Applicant is not eligible for Input Fax Credit on Demo vehicles purchased for furtherance of business, in view of barring provisions of clause (a) of sub-section (5) of Section 17 of GST Act. 2017, as they are not covered by any of the exceptions given in clause (A), (B) or (C) of Sec. 17(5)(a).

MPAAAR: We find that the Ruling given by the Madhya Pradesh Advance Ruling Authority is reasonable, and appropriate. Section 17 (5)(a) prescribes the condition in which input tax credit shall not be available on motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for maki g the following taxable supplies:-

(A) further supply of such motor vehicles; or

(B) transportation of passengers; or

(C) imparting training on driving such motor vehicle;

We drive the conclusion that the demo vehicles used for demonstration and for offering trial facility to customers, are not covered in above exceptions.

Held: We agree with the ruling of Madhya Pradesh Authority for Advance Ruling and in our opinion Appellant is not entitled to avail input tax credit on inward supply of motor vehicles which are used for demonstration purpose as such vehicles do not qualify the exceptions given in clause (A),(B) and (C) of section 17(5)(a) of GST Act, 2017.