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2019 (2) TMI 187 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – TMI – Pure service – Management Consultant and DPR services provided to Chennai Metro Water Supply and Sewerage Board (CMWSSB) for the water related projects at Chennai – whether CMWSSB is Government Entity or not? – Exemption under SI. No. 3 of N/N. 12/2017-CT (Rate) dated 28th June 2017 – Held that:- If any “Pure Services” are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution and that 'Governmental Authority' is an Authority or a Board set up by an Act of Parliament or a State Legislature or established by the Government with 90 percent or more participation by way of equity or control to carry out any function entrusted to a municipality under article 243 W of the Constitution, then the same is exempted vide SI.No. 3 of the Notification No. 12/2017-Central Tax (Rate).
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In the case at hand, from the documents furn

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28th June 2017.
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The activity of the Applicant envisaged by the three agreements furnished by the applicant is supply of 'Pure Services' to CMWSSB which is a 'Governmental Authority” relating to water supply for industrial use and sanitation conservancy which are covered under Twelfth Schedule of Article 243 W of the Constitution. Therefore, the services rendered by the Applicant are exempted from CGST under SI.No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 as amended and exempted from SGST under Sl.No. 3 of the G.O. (Ms) No. 73 dated 29.06.2017 No.II (2)/CTR/532(d-15)/2017 as amended. – Order No. 21/AAR/2018 Dated:- 28-11-2018 – MS. MANASA GANGOTRI KATA, IRS AND THIRU S. VIJAYAKUMAR, M.SC., MEMBER Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling

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TIN: 33AABCT8153B1ZP. They have sought advance ruling on Whether the services rendered by them to CMWSSB is exempted under SI. No. 3 of Notification No. 12/2017-CT (Rate) dated 28th June 201 7 . The Applicant has submitted the Advance Ruling in Form GST ARA – 01 and had enclosed challan for payment of fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017and SGST Rules 2017. 2.1 The Applicant has stated that they have entered into agreement with CMWSSB for Project Management Consultancy for the work Construction Management and Supervision including off-site inspection for the proposed design, Build and Commissioning of 45 MLD capacity Tertiary Treatment Reverse Osmosis(TTRO) Plant at Kodungaiyur &Koyambedu, Chennai City Consultancy Services for preparation of Detailed Project Report for providing Smart Water Supply and Sewerage Services in T.Nagar, Chennai City, under Smart City Mission 2.2. The Applicant has stated that in the pre-GST regime and as per the

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CGST tax and SGST tax on the services rendered to CMWSSB. In light of aforementioned, the Applicant has sought Advance Ruling on whether the services rendered by them to CMWSSB are exempt or taxable? 3. The Applicant was heard in person. Based on the hearing, they have submitted the 3 project contracts viz Tertiary Treatment Reverse Osmosis plants (TTRO) at Koyambedu and Kodungaiyur and for Smart City Mission of T.Nagar Chennai with CMWSSB, which are ongoing for Consultancy Services for Design and Supervision, including Supply of Manpower for the same. They undertook to submit Invoices, Payment Advice and Certificate from CMWSSB on Ownership, so as to be eligible for exemption under SI.No.3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017, as it involved Governmental Authority involving Water Treatment Plant (Tertiary Treatment Reverse Osmosis (TTRO). The Applicant has furnished copy of Invoices raised on CMWSSB in respect of Project Management Consultancy Services (PMC

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idor, North Chennai for their industrial use. The project at Koyambedu, for recycling and re-using of waste water for the uses other than drinking purposes for SIPCOT industries at Irungattukottai, Sriperumbudur and Oragadam for their industrial use. The Applicant will provide supervision of the Construction Works including Design, Testing Quality Assurance, carry out 3rd party inspection of equipment and materials required for construction and commissioning, be responsible for Environmental and social management and sign-off on the expenditure by the project executing authority. As per the contract, the Applicant will be paid for all staff costs, Sub-consultants costs, printing, communications, travel, accommodation and all other costs incurred in carrying out the services. The payment will be on actual cost of deployment of man-power who are specified in the contract. It is seen from the invoices already raised that the Applicant is being paid for Consultancy Fee towards Project Mana

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ying out the services. The payment will be based on the areas of investigation and also on the manpower used for carrying out these services. It is seen from the invoices already raised that the applicant is being paid for Consultancy Fee towards providing Smart Consultancy Services for preparing detailed project report for improvement of Water Supply and Sewerage Services in T Nagar under Smart City Mission . 4.2 The Applicant has also submitted a letter from Managing Director, CMWSSB to the Applicant stating that CMWSSB is a Governmental Authority as per Section 2(16) of IGST Act. It is a Board constituted by an Act of Tamil Nadu State Legislature called Chennai Metropolitan Water Supply and Sewerage Act, 1978 with 100% contribution by way of Government ( by way of takeover of Assets and Liabilities from Chennai Municipal Corporation and Tamil Nadu Water Supply and Drainage Board) and controlled by the Government by way of appointing Directors of the CWSSB Board to carry out the func

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agement Consultancy services in connection with setting up of TTRO Plant at Kodungaiyur & Koyambedu and for Consultancy Services for preparation of detailed project report for providing Smart Water Supply and Sewerage Services in T.Nagar. The Applicant has also stated that CMWSSB is of the view that PMC services rendered by them could be brought within the ambit of Pure Services , as it is an activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution and not reimbursed the GST component of the invoice. The issue to be decided is whether the Applicant is rendering Pure Services' and whether CMWSSB is a 'Governmental authority' as defined in the Notification No. 12/2017. 6.1 The relevant extract of SI.No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 and the relevant definitions are extracted below for ease of reference: 3 Chapter 99 Pure services (excluding works contract service or other composite supp

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nction entrusted to a municipality under article 243W of the Constitution; This definition was later modified vide Notification No 32/2017- Central Tax (Rate) dt. 13.10.2017 (ii) in paragraph 2, for clause (zf), the following shall be substituted, namely: – (zf) Governmental Authority'' means an Authority or a Board or any other Body, – (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90per cent, or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. From the above, it is evident that if any Pure Services are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution and that 'Governmental Authority' is an Authority or a Board set up by an Act of Parliament or a State Legisla

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rticle 243W of the Constitution list the functions of the municipality at SI No 5 as Water Supply for domestic, industrial and commercial purposes and at SI No 6 as Public health, sanitation conservancy and solid waste management . Thus it is clear that CMWSSB is a 'Governmental authority' as defined under 2(zf) of the Notification No. 12/2017-Central Tax (Rate) 28th June 2017. 6.3 On perusal of the agreements furnished by the Applicant, we find that the Applicant provides Project Management Consultancy Services, including Supervision of the Construction Works including Design, Testing Quality Assurance, carry out 3rd party inspection of equipment and materials required for construction and commissioning, be responsible for Environmental and social management and sign-off on the expenditure by the project Executing Authority, to CMWSSB for Construction Management and Supervision including off-site inspection for the proposed Design, Build, Commission of 45 MLD capacity Tertiary

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ations, Travel, Accommodation and all other costs incurred in carrying out the services based on the areas of investigation and manpower used. 6.4 The above clearly shows that the activity of the Applicant envisaged by the three agreements furnished by the applicant is supply of 'Pure Services' to CMWSSB which is a 'Governmental Authority relating to water supply for industrial use and sanitation conservancy which are covered under Twelfth Schedule of Article 243 W of the Constitution. Therefore, the services rendered by the Applicant are exempted from CGST under SI.No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 as amended and exempted from SGST under Sl.No. 3 of the G.O. (Ms) No. 73 dated 29.06.2017 No.II (2)/CTR/532(d-15)/2017 as amended. 7. In view of the foregoing, we rule as under: RULING The activity of the Applicant as per the three contracts entered into with Chennai Metro Water Supply and Sewerage Board i.e. for Project Management Con

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2019 (2) TMI 188 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – TMI – Classification of goods – rate of tax – Bags made of Non-Woven Fabrics of Polypropylene / 100% Cotton (Grey Fabrics) used the Packing of goods, commonly called as Stick Bags, Wedding Gift Bags, Re-useable Shopping Bags, Draw-String, Gift Bags, Garment Bags, etc. – Held that:- The bags which are used for packing of goods for transport, storage and sale are covered under 6305 – In this case the bags of any materials are used for packing the goods which are then put up for sale, transport or storage. That is such goods because of their very nature, being loose, flowing or in bulk etc, cannot be sold without packing by such bags. However, in the instant case, the Applicant has stated that the goods in question are carry bags also called as Re-usable Shopping Bags, Drawstring Gift Bags, Garment Bags. These Bags have handles for carrying. Textiles or jewellery or other items after they are purchased by the Customers are put

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under SGST Act 2017 as per Sl.No.124 of Schedule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amended respectively. – Order No. 20/AAR/2018 Dated:- 28-11-2018 – MS. MANASA GANGOTRI KATA, IRS AND THIRU S. VIJAYAKUMAR, M.SC., MEMBER Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisi

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/ Wedding Gift Bags / Packing Bags made of Non-woven Fabrics of Polypropylene / 100% Cotton (Grey Fabrics); Their bags are mainly purchased by the Show Rooms (Cars, Bikes, Vehicle Parts and Spectacles), Textile Shops, Silk Emporiums, Jewellery Shops, Retail Outlets of Commercial products etc. for the purpose of packing of their products to the ultimate customers.; They are bags of a kind used for the packing of goods commonly called as, 'Re-usable Shopping Bags, Drawstring Gift Bags, Garment Bags, etc.'; The major raw material for the manufacture of the said bags is Non-woven Fabrics falling under heading 5603/ 'grey fabrics/woven fabrics of 100% cotton falling under heading 5208 of first schedule to Customs Tariff Act 1975.; The said bags are manufactured through the processes of cutting, printing (either screen or off-set), sewing and handle fixing (either sticks or same material). 2.2 The Applicant has further stated that the classification of Non-Woven Fabrics of Polyp

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y, the said 'Bags made of Non-woven Fabrics of Polypropylene are rightly classifiable under Tariff item No. 6305 33 00, as 'Sacks and Bags, of a kind used for packing of goods, of man-made textile materials, of Polypropylene strip or the like and Bags made of cotton are rightly classifiable under Tariff Item No.6305 20 00 as Sacks and Bags, of a kind used for packing of goods, of Cotton respectively. The above said classification under the Customs Tariff is aligned with the HSN Code and it appears both in Schedule I and Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017 as amended and G.O. Ms. 157 dated 14.11.2017 of the Government of Tamilnadu the rate of tax is levied based on the value of the product, i.e., @ 2.5% – for value not exceeding ₹ 1000 per piece and @ 6%- for sale value exceeding ₹ 1000 per piece. In the present case, the sale value of 'Bags made of Non-woven Fabrics of Polypropylene/woven fabrics of cotton is less than &#83

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the Bags and the applicability of the Actual Rate / Heading is the issue to be discussed and clarified. From the various submissions of the Applicant, it is evident that the Applicant purchases Non-woven Fabric roll, convert into sheets by cutting and on printing according to requirements of customers (either screen or off-set), stitch into bags which are used in Show Rooms (Cars, Bikes, Vehicle Parts and Spectacles), Textile Shops, Silk Emporiums, Jewellery Shops, Retail Outlets of Commercial products etc. for the purpose of packing their products to the ultimate customers. They are bags of a kind used for the packing of goods commonly called as Re-usable Shopping Bags, Drawstring Gift Gags, Garment Bags. The Bags have handles made out of stick or same materials. The purchase Invoices indicate purchase of Non-woven Fabrics and plain Cotton cloth. It is seen in the Sale Invoices that the Applicant is variously describing them as Non-woven Bags , Cloth Bags etc. of various sizes. 5.1 Th

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6305 10 30 Jute hessian bags kI- 25% – 6305 10 40 Jute sacking bags kg. 25% _ 6305 10 50 Jute wool sacks kg. 25% – 6305 10 60 Plastic coated or paper cum polythene lined jute bags and sacks kg. 25% – 6305 10 70 Paper laminated hessian jute kg. 25% – 6305 10 😯 Jute soil savers kg. 25% – 6305 10 90 Other kg. 25% – 6305 20 00 – Of cotton kg. 25% Of man-made textile materials : 6305 32 00 Flexible intermediate bulk containers kg. 25% – 6305 33 00 – Other, of polyethylene or polypropylene strip or the like kg- 25% – 6305 39 00 – Other kg. 25% – 6305 90 00 – Of other textile materials kg. 25% – 6306 TARPAULINE AWNINGS AND SUNBLINDS: TENTS HSN explanatory Notes to chapter 6305 states: This heading covers textile sacks and bags of a kind normally used for the packing of goods tor transport, storage or sale. These articles, which vary in size and shape, include in particular flexible intermediate bulk containers, coal, grain, flour, potato, coffee or similar sacks, mail bags, and sma

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, suit-cases, vanity-cases, executive- cases, BRIEF-CASES, SCHOOL SATCHELS, SPECTACLE CASES, BINOCULAR CASES, CAMERA CASES, MUSICAL INSTRUMENT CASES, GUN CASES, HOLSTERS AND SIMILAR CONTAINERS; TRAVELLING-BAGS, INSULATED FOOD OR BEVERAGES BAGS, TOILET BAGS, RUCKSACKS, HANDBAGS, SHOPPING-BAGS, WALLETS, PURSES, MAP-CASES, CIGARETTE-CASES, TOBACCO-POUCHES, TOOL BAGS, SPORTS BAGS, BOTTLE-CASES, JEWELLERY BOXES, POWDER-BOXES, CUTLERY CASES AND SIMILAR CONTAINERS, OF LEATHER OR OF COMPOSITION LEATHER, OF SHEETING OF PLASTICS, OF TEXTILE MATERLALS, OF VULCANISED FIBRE OR OF PAPERBOARD, OR WHOLLY OR MAINLY COVERED WITH SUCH MATERLALS OR WITH PAPER – Trunk's, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels and similar containers: 4202 11 – With outer surface of leather or of composition leather: 4202 11 10 Travel goods (trunks, suit-cases, sports bags and other similar items ) of leather u 10% – 4202 11 20 Toilet-bags and cases, of leather u 10% 4202 11 30 Satchel

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edule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amended respectively. The relevant entries are found in Schedule III attracting 9% tax as given under: 124. 4202 School satchels and bags other than of leather or composition leather 125. 4202 12 10 Toilet cases 126. 4202 22 10 Hand bags and shopping bags, of artificial plastic material 127. 4202 22 20 Hand bags and shopping bags, of cotton 128. 4202 22 30 Hand bags and shopping bags, of jute 129. 4202 22 40 Vanity bags 130. 4202 29 10 Handbaas of other materials excluding a wicker work or basket work The said entries stands amended vide Notification No. 41/2017- C.T(Rate) dated 14.11.2017 effective from 15.11.2017. The Hand bags and Shopping bags made of cotton and jute were moved from schedule III to Schedule II attracting rate of tax of 6%-CGST. (B) in Schedule II -6%, – (xii) for S. Nos. 89, 90 and the entries relating thereto, the following shall b

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after S. No. 124 and the entries relating thereto, the following serial numbers and the entries shall be inserted, namely: – 124A 4203 Articles of apparel and clothing accessories, of leather or of composition leather [other than gloves specially designed for use in sports] 124B 4205 Other articles of leather or of composition leather 124C 4206 Articles of gut (other than silk-worm gut), of goldbeater's skin, of bladders or of tendons ; (xlii) S. No. 125, 126, 127, 128, 129 and 130 and the entries relating thereto shall be omitted: From the above, it is evident that the Carry Bags/Shopping Bags made-up of Cotton are taxable at 6% under CGST Act 2017 and at 6% under SGST Act 2017 as per Sl.No.89 of Schedule II while those Carry Bags made of Non-woven Fabrics are taxable to 9% under CGST Act 2017 and 9% under SGST Act 2017 as per Sl.No.124 of Schedule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amend

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2019 (2) TMI 189 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – TMI – Classification of goods – rate of tax – Nonwoven and Cotton bags – Held that:- The carry bags or shopping bags are covered in the Customs Tariff under CCTH 420222 depending on the material they are made up of – Shopping bags made of cotton are classified under CTH 42022220 and those made of non-woven fabrics are classifiable under CTH 42022210.
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Rate of tax – Held that:- Non-woven and cotton carry bags supplied by the Applicant were taxable to 9% CGST and 9% SGST as per SI no 126 and 127 of Schedule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amended respectively – the carry bags/shopping bags made of cotton/jute are taxable at 6% CGST and at 6% SGST as per SI no 89 of Schedule II while those carry bags made of non-woven fabrics are taxable to 9% CGST and 9% SGST as per SI no 124 of Schedule III of Notification No. 01/2017-CT (Rat

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e Madurai District Non-woven Bag and Cotton Bag Manufacturing Association having registered office at No. 19-B, Meenakshi Nagar, 3rd Street, Villapuram, Madurai – 625 012 (hereinafter called the Applicant) is Registered under the GST Act, 2017 with Trade name SAVANI SCREEN and GSTIN 33CJOPS0399M1ZE. They have filed an Application Seeking Advance Ruling in form GST ARA-01. Classification of Nonwoven and Cotton bags and the Rate of tax to be charged under the GST Act. The Applicant has submitted a copy of Challan evidencing payment of application fees of ₹ 5, 000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The Applicant manufactures Non-woven Bags and Cotton Bags. The basic raw material for Non-woven Bags is Non-woven Fabrics made up of Polypropylene . They receive Poly-Propylene rolls of (size) 63 Width and also in customized sizes as per their requirements. The Non-woven fabric rolls are first cut into sheets of needed size, then the sheets a

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on-woven Bags and cotton bags are covered under various headings at different rates of tax as follows:- Heading: 4202 – 18 % or 12 % Heading: 5603 – 12 % Heading: 6305 – 5 % Hence, clarification was sought to applicable rate of tax out of these headings. The applicant's interpretation is that the end products are used only for packing and are to be classified under CTH 6305 and charged to 5% GST. 3. The Applicant was personally heard on the matter. They submitted samples of Non-woven fabric and Cotton bags. They stated that they purchase Non-woven fabric and Cotton fabric and print the name on the fabric as requested by the customer. The bags have handles made out of same materials or PVC sticks or Bamboo Sticks. The Non-woven fabrics in Poly-Propylene spun fabric and printing and stitching are done manually. These carry bags are sold to textile shops that put the textiles bought in the bags while selling the textiles. They also furnished copies of purchase and sales invoices relat

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to size and on printing, stitch into bags. The sheets are printed according to requirements of Customers such as designs, shop name and address. The bags have handles made out of same materials or PVC sticks or Bamboo Sticks which are used as carry bags in Textile show rooms/Textile dealers, jewelry shops. The Applicant has sought the classification and has stated that 4202, 5603, 6305 are the competing Chapter Headings. 5.1 In terms of explanation (iii) and (iv) to Notification No. 1/2017 – Central Tax (Rate) dt. 28-06-2017, Tariff item , Sub-heading , Heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. Accordingly, the competi

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NBLINDS: TENTS 6306 TARPAULINE AWNINGS AND SUNBLINDS: TENTS HSN explanatory Notes to chapter 6305 states: This heading covers textile sacks and bags of a kind normally used for the packing of goods tor transport, storage or sale. These articles, which vary in size and shape, include in particular flexible intermediate bulk containers, coal, grain, flour, potato, coffee or similar sacks, mail bags, and small bags of the kind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets. It is evident that bags which are used for packing of goods for transport, storage and sale are covered under 6305. In this case the bags of any materials are used for packing the goods which are then put up for sale, transport or storage. That is such goods because of their very nature, being loose, flowing or in bulk etc, cannot be sold without packing by such bags. However, in the instant case, the Applicant has stated that the goods in question are carry bags

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ity-cases, executive-cases, brief-cases, school satchels and similar containers: 4202 11 – With outer surface of leather or of composition leather: 4202 11 10 Travel goods (trunks, suit-cases, sports bags and other similar items ) of leather u 10% – 4202 11 20 Toilet-bags and cases, of leather u 10% 4202 11 30 Satchels u 10% _ 4202 11 40 Brief-cases u 10% – 4202 22 – With outer surface of sheeting of plastics or of textile materials : 4202 22 10 Hand-bags and shopping bags, of artificial plastic material u 10% 4202 22 20 Hand-bags and shopping bags, of cotton u 10% 4202 22 30 Hand-bags and shopping bags, of Jute u 10% 4202 22 40 Vanity-bags u 10% 4202 22 90 Other u 10% 4202 29 – Other : 4202 29 10 Hand bags of other materials excluding wicker-work or basket work u 10% 4202 29 90 Other u 10% From the above, it is seen carry bags or shopping bags are covered in the Customs Tariff under CCTH 420222 depending on the material they are made up of. Shopping bags made of cotton are

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Notification No. 41/2017- C.T(Rate) dated 14.11.2017 effective from 15.11.2017. The Hand bags and Shopping bags made of cotton and jute were moved from schedule III to Schedule II attracting rate of tax of 6%-CGST. (B) in Schedule II -6%, – (xii) for S. Nos. 89, 90 and the entries relating thereto, the following shall be substituted, namely 89 4202 22 20 Hand bags and shopping bags, of cotton 90 4202 22 30 Hand bags and shopping bags, of jute ; and the entries at Schedule III from 124 to 130 were replaced as under: (C) in Schedule III-9%, – (xl) in S. No. 124. for the entry in column (3). the entry Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling-bags, insulated food or beverages bags, toilet bags, rucksacks, handbags, shopping bags, wallets, purses, map-cases, cigarette-cases, tobacco- pouches, tool bags, sports bags, bottle-

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89 of Schedule II while those carry bags made of non-woven fabrics are taxable to 9% CGST and 9% SGST as per SI no 124 of Schedule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amended respectively. 6. In view of the foregoing, we rule as under: RULING 1. Non-Woven carry bags supplied by the Applicant are classifiable under CTH 4202 22 10 and cotton carry bags supplied by the Applicant are classifiable under CTH 4202 22 20. 2. Upto 14.11.2017, Non-woven and cotton carry bags supplied by the applicant were taxable at 9% CGST and at 9% SGST as per SI no 126 and 127 of Schedule III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017 as amended respectively. From 15.11.2017 onwards, Cotton Carry Bags are taxable at 6% CGST and at 6% SGST as per SI no 89 of Schedule II while Non-woven carry bags are taxable to 9% CGST and 9% SGST as per SI.

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GST – States – Scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the context of del-credre agent. – TMI Updates – Highlights

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Customs – Refund of IGST paid on exports of goods done from Non-EDI sites-reg. – TMI Updates – Highlights

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Goods and Services Tax – Started By: – Ravikumar Doddi – Dated:- 27-11-2018 Last Replied Date:- 29-11-2018 – Dear sir, Whether GST is payable or not on royalty paid to Govt by Mining companies, at what rate if it is exempted PL give the notification or circular and SAC code. – Reply By KASTURI SETHI – The Reply = As per FAQ dated 31.7.17 (Q.No.22) GST is payable on royalty paid to Govt. under RCM.Question 22 : Whether GST is payable on royalty (to be paid to Government) for Mining Lease gr

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Goods and Services Tax – Started By: – Kaustubh Karandikar – Dated:- 27-11-2018 Last Replied Date:- 3-12-2018 – XYZ is making payment to various parties on behalf of the persons / entities which are related to XYZ. The amount so paid is debited to the respective person / entities account. This being paid on behalf of related parties; will it amount to rendering service to related parties and XYZ will be liable to pay GST on it even if no consideration is received from related parties? – Reply By KASTURI SETHI – The Reply = Answer is 'yes'.This activity is in the course or furtherance of business. Hence covered under Serial No.2 of Schedule-1 (Section 7). Moreover XYZ is working for and on behalf of related parties and XYZ can be te

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he Reply = Kasturi SirDefinition of intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account. In this case XYZ is not facilitating the supply of goods/services. Instead his role comes after the supply has already been made. Further, intermediary supplies his services, doesn't lend. In this case, XYZ is actually lending money to his related persons and on the instructions of these related persons payment is made to third parties. – Reply By KASTURI SETHI – The Reply = O. K. Sir I agree with you.

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Goods and Services Tax – Classification of supply – The activities performed under the ‘Comprehensive Maintenance Contract’ are to be treated as a composite supply of services and the activities perfo

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Goods and Services Tax – Levy of GST – One time concession fees charged – the applicant is not entitled for the benefits of exemption and the activity of long term lease is liable for levy of GST. – TMI Updates – Highlights

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Goods and Services Tax – Penalty u/s 129 of GST Act – E-way bill – transport at the behest of an individual, an unregistered person – if the conditions under the Act and Rules are not complied with, d

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 27-11-2018 – Advance rulings are important in any tax law as it provides a forum for clarification and possible interpretation of statutory provisions. Moreover, it conveys the legislative intention from the revenue s view point. Provisions of advance ruling are contained in section 95 to 106 of CGST Act, 2017 and State / UT GST enactment. Rules 103 to 107 of also provide for forms, manner, certification etc. The Authority for Advance Rulings (AAR) have been set up in all the states and we have now over 200 advance rulings on different issues already pronounced by various State Authorities. The appellate mechanism for filing appeals against AAR rulings is also in place and we have about twenty such appellate orders confirming or modifying the AAR orders. One major issue presently being faced is about multiple authorities (equal to number of States), each pronouncing a ruling of its own even if the matter is covered by s

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said goods fall under Chapter Heading 8438 of Tariff and whether GST shall be applicable @18%. The Authority for Advance Ruling ruled that 'Ice cream making machine' is classifiable under Tariff heading 84.18 of Customs Tariff Act, 1975 instead of 8438 and GST rate applicable to said product at the rate 28% [Mitora Machinex (P.) Ltd., In re (2018) 6 TMI 624 (AAR,Gujarat); ] The assessee made an application before the Authority for Advance Ruling and sought ruling on the following issues : Whether Tariff Heading 8535 covers products 'Electrical apparatus for switching or protecting electrical circuits or for making connections to or in electrical circuits for a voltage exceeding 1,000 volts and product Lighting Arrester is specifically covered under Tariff Heading 8535 Whether Earthing Pipe specifically processed to make solely and principally for lightning arrester system and placed below ground level and connected with Lighting Arrester System and is classifiable under Tar

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AT ] Where the assessee made an application before the Authority for Advance Ruling and sought ruling on whether roof ventilators are classifiable as air or vacuum pumps under heading 8414 of Customs Tariff as adopted by GST. As per the Rules for Interpretation of Customs tariff as made applicable to GST Tariff and General rules for Interpretation of the schedule, classification of Goods shall be governed by certain principles laid down therein. As per these general rules for interpretation, the heading which provides the most specific description shall be preferred to headings providing a more general description. The primary function of these Roof ventilators is to provide ventilation by continuous extraction of air from the building. Even in trade parlance these goods are identified as Roof ventilators only and not as Windmills as contested by the applicant. Hence, in accordance with the general rules for interpretation, these Roof ventilators are correctly classifiable under the he

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Advance Ruling on activities relating to agricultural produce Where the assessee is engaged into the activities of cleaning of the various Agriculture produce like saunf (fennel), dhaniya (coriander), Jeera (cumin seeds), etc. or the like goods which are brought to them by the farmers or by the traders. Such agricultural produce contains dust particles, certain small pieces of stones, dust, mud and other impurities etc. The applicant is having cleaning plant and they remove the various impurities but do not change the essential character of the agriculture produce but make the product marketable for primary market. The assessee made an application before Authority of Advance Ruling and sought ruling on whether the activity of cleaning agricultural produce such a saunf, dhaniya (Coriander), jeera (cumin seeds), etc. by removing impurities like dust particles, stones, etc. carried in cleaning plant shall be fully exempt from GST under Notification Nos. 11/2017-C.T. (Rate) and 12/2017- C.

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2018 (11) TMI 1571 – KERALA HIGH COURT – [2019] 61 G S.T.R. 185 (Ker) – Detention of goods – the vehicle driver showed the invoices and e-way bills meant for intra-state transport, that is from Ernakulam to Thalassery and Kozhikode. He could not show the e-way bill from Bangalore to Ernakulam – Held that:- If online generation of e-way bill suffices, the Rule would not have insisted on the consignment carrying a copy of the bill or the number in electronic form. At any rate, the issue now concerns only the provisional release and the statute provides an efficacious mechanism for that. Of course, the statutory compliance for the provisional release does visit on the petitioner with certain financial burden, as it has to produce the Bank Guarantee.
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The Court should adopt a pragmatic view rather than a pedantic one. True. But in the name of interim orders and in the name of our exercising judicial discretion at the threshold, we cannot afford to chip away at the statutory scheme-e

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itioner proposed to send them to Ernakulam and from there, it wanted to distribute to the customers at Thalassery and Kozhikode, through local conveyance. The petitioner thus claims to have generated the invoice and e-way bill at 5.57 PM on 21.11.2018 and dispatched the goods through a truck. 2. As the petitioner pleads, because of the customers demand and also as a matter of commercial experiency, rather than route the consignment through Ernakulam, it sent the goods directly to the customers. En route, the Assistant State Tax Officer intercepted the goods and detained them. On his demand, the vehicle driver showed the invoices and e-way bills meant for intra-state transport, that is from Ernakulam to Thalassery and Kozhikode. He could not show the e-way bill from Bangalore to Ernakulam. 3. In response to the statutory notice issued, the petitioner submitted the Ext.P15 reply, besides pleading personally before the authorities for the release of the goods. But as the Assistant State T

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y bill first generated for transporting the consignment from Bangalore to Ernakulam. Sri Sreekumaran also asserts that, viewed from any perspective, there is no tax evasion. Not even the authorities could entertain any such suspicion because the entire transaction is above board. He has fervently pleaded that it is a fit case where the Court should take a pragmatic view, instead of a pedantic one. 6. In response, Dr.Thushara James, the Government Pleader, has drawn my attention to Rule 138A of the GST Rules. According to her, though the e-way bill, once generated, could be verified on-line, the legislature and the executive in their wisdom have mandated under this Rule that the consignment should carry a copy of the eway bill in physical form, or at least its number in the electronic form. Therefore, the Assistant State Tax Officer has detained the goods only in compliance with Rule 138A, she adds. 7. Dr. James has also submitted that after getting the goods provisionally released unde

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d on to the conveyance in such manner as may be notified by the Commissioner: Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement of goods by rail or by air or vessel: [Provided further that in case of imported goods, the person in charge of a conveyance shall also carry a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A of FORM GST EWB-01. (2) A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the said portal, a tax invoice issued by him in FORM GST IN V-1 and produce the same for verification by the proper officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of uploading (3) Where the registered person uploads the invoice under sub-rule (2), the information in Part A of FORM GST EWB-01 shall be auto-populated by the common portal on the basis of the informati

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and the statute provides an efficacious mechanism for that. Of course, the statutory compliance for the provisional release does visit on the petitioner with certain financial burden, as it has to produce the Bank Guarantee. But the pleas now the petitioner's counsel has urged before me are the ones that deserve consideration on merits, when the State Tax Officer decides on the legality of detention. 11. I may add a word in response to the petitioner s plea that the Court should adopt a pragmatic view rather than a pedantic one. True. But in the name of interim orders and in the name of our exercising judicial discretion at the threshold, we cannot afford to chip away at the statutory scheme-especially if the scheme has an economic efficacy. I do agree that under exceptional circumstances, we can soften the rigour of the law, but can ill afford to ignore the law. The issues the petitioner raised here are the ones to be considered on merits finally-but not at the threshold and defi

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2018 (11) TMI 1572 – ALLAHABAD HIGH COURT – TMI – Seizure of goods in transit – seizure on the ground that E- Way Bill the number of tax invoice was incorrectly mentioned – Held that:- There is no discrepancy in any document accompanying the goods which may amount to contravening the provisions of the act to permit the seizure of the goods.
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Sri C.B. Tripathi is directed to file counter affidavit within three weeks. One week thereafter is allowed to the petitioner for filing rejoinder affidavit. – Writ Tax No. – 1494 of 2018 Dated:- 27-11-2018 – Pankaj Mithal Versus Pankaj Bhatia JJ. For the Petitioner : Ankur Agarwal,Suyash Agarwal For the Respondent : C.S.C.,A.S.G.I. ORDER Heard Sri Suyash Agrawal and Sri C.B. Tripathi, learned cou

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2018 (12) TMI 346 – ALLAHABAD HIGH COURT – TMI – Successive writ petition for same cause of action – Validity of challenge to the order dated 31.1.2018 – seizure of goods with vehicle – Held that:- In case we allow the petitioner to challenge the said order in this writ petition it would amount to filing of successive writ petitions for one of the causes of action involved in the earlier writ petition.
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It is settled law that successive writ petitions for the same cause of action are not maintainable and all questions which could have been taken or ought to have taken and if not decided would be deemed to have been adjudicated or declined – This apart the seized goods of the petitioner have already been released – petition dismissed

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was amended and challenge was also made to the order dated 31.1.2018 which has been challenged in this petition. The aforesaid writ petition was ultimately dismissed but without adjudicating the validity of the aforesaid order. In view of the dismissal of the above writ petition the matter with regard to challenge to the order dated 31.1.2018 as has been made in this petition has come to an end. In case we allow the petitioner to challenge the said order in this writ petition it would amount to filing of successive writ petitions for one of the causes of action involved in the earlier writ petition. It is settled law that successive writ petitions for the same cause of action are not maintainable and all questions which could have been take

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2018 (12) TMI 934 – MADRAS HIGH COURT – TMI – Abatement claim – receipt of payment after 1.6.2007 – whether the Tribunal was right in allowing the appeals filed by the assessee without verifying the claim of the assessee that they completed the services prior to 01.6.2007 and consequently, they are entitled for abatement? – Held that:- The matters are remanded to the Adjudicating Authority to verify as to whether the assessee is entitled to the benefit of the decision of the Hon’ble Supreme Court in the case of Larsen & Toubro Limited [2015 (8) TMI 749 – SUPREME COURT] and examine as to whether the assessee has completed the services prior to 01.6.2007 though payments were received by the assessee after the said date – appeal allowed by way of remand. – Civil Miscellaneous Appeal Nos.2745 to 2749 of 2018 And CMP.Nos.20855, 20857, 20860 & 20863 of 2018 Dated:- 27-11-2018 – Mr. Justice T.S. Sivagnanam And Mr.Justice N. Sathish Kumar For the Appellant : Mr.T.Pramod Kumar Chopda For the

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ompletion of services by the respondent prior to 01.6.2007 when, admittedly, certain payments were received after 01.6.2007? and iii. Whether, in the facts and circumstances of the case, the Tribunal was right in allowing the appeals by following the decision rendered in the respondent s own case wherein the Tribunal remitted the matter for verification of the claim before the Lower Authority? 4. The short issue, which falls for consideration, is as to whether the Tribunal was right in allowing the appeals filed by the assessee without verifying the claim of the assessee that they completed the services prior to 01.6.2007 and consequently, they are entitled for abatement. 5. We have perused the common order passed by the Tribunal and we find that the Tribunal took note of an earlier passed in the assessee s own case in Final Order No.40902/2016 dated 06.6.2016. 6. The learned Senior Standing Counsel appearing for the appellant has contended that the said final order passed by the Tribu

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he appellant, since the Tribunal, in the said common impugned order, has not given any specific finding with regard to the relevant assessment year as to whether the services were rendered by the assessee prior to 01.6.2007 though they received the payment after the said date. 9. The learned counsel for the assessee point out that after remand, the Adjudicating Authority took up the matter, verified all the details and passed an order dated 27.1.2017 accepting the case of the assessee and dropping the proceedings initiated in the show cause notice dated 30.11.2010. It is further pointed out that in yet another assessment for the period from April 2011 to March 2012 and for the subsequent periods, show cause notices were issued and were adjudicated and Orders-in-Original dated 22.3.2018 were passed dropping the proposal in the relevant show cause notices by accepting the claim of the assessee with regard to abatement. 10. Though the learned counsel for the assessee is partially right in

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Goods and Services Tax – Supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop which also runs a restaurant – bundled services – The supply shall be

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Goods and Services Tax – Supply or not – amount passed on to the customer by Del Creder Agent (DCA) on account of the early payment before credit period allowed by principal – since it is in the natur

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Goods and Services Tax – Started By: – MJ Enterprises – Dated:- 26-11-2018 Last Replied Date:- 28-11-2018 – Section 2(68) of the CGST Act, 2017 defines job work as any treatment or process undertaken by a person on goods belonging to another registered person . The one who does the said job would be termed as job worker . The ownership of the goods does not transfer to the job worker but it rests with the principal. The job worker is required to carry out the process specified by the principal, on the goods. MyQuery is : It is immaterial as to whether the job worker undertakes job work in his premises or in the premises of service receiver.? and which say with Rules and section Please can provided it. – Reply By DR.MARIAPPAN GOVINDARAJAN –

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npower. – Reply By KASTURI SETHI – The Reply = All the above factors are hinting at separate premises. Even separate registration is required for doing job work, if turnover exceeds threshold exemption limit. – Reply By Venkat Enterprises – The Reply = He'll sir,Thank you for your reply, but sir if one job work forming work of principles and for some work he entered into contract with other and who performing there job on the premises of job worker. As job worker can employee other job worker for the completion of principles job as there is no provision in section of job work. Can this contract is treated as job work (supply of labour) and if not what will the treatment? – Reply By KASTURI SETHI – The Reply = Goods received by the job w

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Goods and Services Tax – GST – By: – Sandeep Rawat – Dated:- 26-11-2018 Last Replied Date:- 19-1-2019 – Area wise working / checklist for annual return and GST audit As this is first year of annual return and GST audit, registered person as well as professional are also in dilemma situation for fulfilling the compliance under GST law so that the requite information which is required in filing the annual return and GST audit could be prepared in time and order. In this regards I have prepared areas wise working plan/checklist which prescribed the requisite documents and actions for the annual return and GST audit. GST REGISTRATION CERTIFICATE Have you checked whether the Supplier has applied for New Registration or has he Migrated? Have you checked the registration details of: Registered Person, Business Verticals, Factory / Warehouse / Godown, ISD and in respect of other place of business? Whether GSTIN is displayed in Name Board viz., Godown /Branches / other places of business? Whet

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are issued as per the provisions of the GST law as per section 34? Whether Credit note/Debit Note is issued before 30th September of the Subsequent Financial Year? Have you checked correctness of Tax Invoice /Bill of supply with the appropriate Supply Register/ GSTR 1? Whether the Tax Invoice/Bill of supply is cancelled for genuine reasons, if any like Name of party /details where applicable? Whether any Invoice cum Bill of supply is raised for specific transactions? Whether the transport documents are maintained and verified? Whether any copies of Credit Note and Debit Note are raised otherwise than as specified in section 34? Whether the Delivery challan/E- way bill Register is maintained? Whether Series of documents issued as per clause 13 of GSTR 1 matches with Books of Account from July 2017 to March 2018? GOODS SENT TO JOB WORK Whether the conditions are fulfilled for claiming input tax credit on goods (including capital goods) sent for job work? Whether the Principal has sent g

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he registered person Have you checked Interstate supply as per section 7(5) of IGST Act 2017? Have you checked Intra State supply as per section 8 of IGST Act 2017? Whether the Zero-rated supply is verified as per the provisions of the law? Whether the supplies made by registered person falls within the meaning of Composite /non- composite/ Mixed supply? If yes, whether the same has been offered to tax as per section 8 of CGST Act? Have you checked for sale of capital goods and the GST charged and as to whether they are included in the returns filed ? Whether Interstate supply is regarded as Intra state supply and vice versa? Whether abatement provisions, if any, are applicable (like one third for land) is compiled with? Whether the transactions are correctly classified as supply of goods or supply of services? Have you checked the deemed supply as per schedule I? Are there any transactions wherein the goods sent for job work not received back is treated as supply? TIME OF SUPPLY Wheth

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if any? Have you reconciled tax collections with payments and transfer of the balance to appropriate accounts? Have you checked adjustment of tax set-off by relevant journal entries? Have you checked that input tax credit on capital goods is correctly availed? Whether Input Tax credit is reversed for the sale of capital goods as specified in GST law? Any Reversal of input tax credit for the goods sent for job work? Whether the recipient of supply has effected payment for such inward supply within 180 days from the date of Invoice? Whether input tax credit availed is debited to recoverable account for availing re-credit? Whether the supplier has availed both benefits of depreciation and input tax credit? Whether the documents (tax invoice/ debit note) on the basis on which input tax credit is claimed contains the mandatory details of recipient such as Name, GSTIN, Address and all other particulars as prescribed? Whether Input tax credit is reversed against the receipt of credit note Whe

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calculation of Turnover for allocating the input tax credit is as per the law? Whether the ISD invoice containing the relevant particulars is issued correctly as per the provisions of the law? CLASSIFICATIONS Whether the classification of goods/ services is in conformity with the Schedules / Notifications? Whether the HSN classification is verified to confirm the rate of tax on goods and services? Whether the HSN details for inward and outward supply are verified? Whether the SAC code/HSN code is as per the law? Whether the HSN /SAC classification is same as followed in erstwhile law if applicable? Is there any specific Advance Ruling applicable? Whether there has been any change in rate of tax during the period by way of amendment in rate of tax notification or exemption notification? RETURNS Whether the copies of GST returns filed by the registered person are reviewed? Whether reconciliation of GSTR 9 with GSTR1 and GSTR 3B is done? Whether interest which was due, has been paid whil

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? Whether reverse charge tax has been paid wrongly in lieu of CGST/SGST as IGST or vice versa? Whether corresponding input tax credit is availed on Reverse charge? Whether conditions of paying tax for RCM are fulfilled? VALUE OF SUPPLY Whether all the inclusions to the value of supply as per section 15 of the Act have been verified? Whether discount offered to customers (pre/ post supply) is not included in the value of supply after fulfilment of conditions under section 15(3) of the Act? Whether valuation rules have been applied as per the GST law? Whether the registered person has claimed any pure agent deduction as per Rule 33? In case the value of supply is inclusive of GST, whether the taxable value and tax amount is determined as per Rule 35 of CGST Rules, 2017? In case of exports, whether the rate of exchange of currency is determined as per Rule 34 of CGST Rules, 2017? Whether rate of tax charged for the supplies is as per the GST rate notifications issued/ amended from time to

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he conditions for location of recipient are fulfilled? Whether the wrong payment of tax i.e. IGST in lieu of SGST/CGST is claimed as refund? Whether the wrong payment of tax i.e. SGST/CGST in lieu of IGST is claimed as refund? Whether the Supply by SEZ to DTA is treated as inter-State subject to fulfilment of conditions? REFUND Whether the Supplier is eligible for Refund as per section 54? Whether the supplier has applied for Refund and whether it is sanctioned? Whether any Refund is Rejected or pending before the Authority? Whether the Refund is Re-credited to Electronic Credit Ledger? Whether the Manual /Electronic documents for Refund are verified? Whether the Accounting impacts are given for Refund applied, pending rejected or appealed? Whether any Refund is wrongly applied like input services/Capital goods credit for inverted duty structure? Whether Refund and Input Tax credit is claimed for the same transactions? Whether interest on delayed refund is receivable? INWARD SUPPLY Hav

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ach place of business? Whether books of accounts are maintained manually or electronically? If the same is maintained electronically, whether the software used complies with the requirements of the law? Whether the copies of Agreements/Agent agreement and other supporting documents are obtained? Whether the copies of Audited Financial Statements for each registration wise are obtained? Whether Transporter/Warehouse keeper has maintained the books of Account as per the law? Whether the Register E-way Bill/Delivery challan is maintained as per the law? Whether E- Way bills are used for valid purpose? Whether the register of ITC-01, ITC-02, ITC-03 and ITC 04 is maintained as per the GST law? Whether the supplier maintains the Cash/Bank Register for recording the transactions entity wise? Whether the books of Accounts maintained centralized or decentralized? GENERAL Whether the registered person has complied with Anti-Profiteering clause? Whether reliance is placed on any notifications / c

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 26-11-2018 – It is now affirmed that beer bearing a brand or owned by brand owners which are manufactured by Contract Bottling Units or tie-up units (generally known in trade as CBUs) is a supply of service which attracts Goods and Services Tax (GST). A recap United Breweries Ltd. sought an advance ruling from the Authority for Advance Rulings (AAR), Karnataka on the following two issues: Whether beer bearing brand/s owned by Brand Owner manufactured by Contract Brewing Units (CBUs) out of the raw materials, packaging materials and other input materials procured by it and accounted by it and thereafter selling such beer to various parties under its invoicing would be considered as supply of services and whether GST is payable by the CBUs on the profit earned out of such manufacturing activity? and Whether GST is payable by the Brand owner on the Surplus Profit transferred by the CBU to the Brand Owner out of such manufa

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hat since the applicant is engaged in supply of service and the service does not find mention at any other entry in the Classification table it has to be placed in the residual entry. The applicable rate of Central Tax as per serial number 35 of the Notification No. 11/2017-CT(Rate) dated 28.06.2017. It was also ruled that GST is payable by the Brand owner on 'Surplus Profit transferred by the CBU to brand owner out of the manufacturing activity and the supply of service to the CBUs is classified under Service Code (Tariff) 999799 and liable to pay GST at 18% (CGST-9%, SGST-9%) on the amount received from the CBUs. [As reported in IN RE : M/S UNITED BREWERIES LIMITED (2018) 7 TMI 835; vide ruling dated 28.06.2018]. Appellate Affirmation Industry leader, not being satisfied, approached the doors of Appellate Authority of Advance Ruling (AAAR), Karnataka for a review. It was submitted against the said ruling that AAR has erred in holding that the classification of 'other miscella

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e is only a monetary transaction between the Appellant and the CBU by way of transfer of apportioned profit from supply of beer, which is excluded from the ambit of charge under provision of the said Act. The Authority erred in not appreciating the fact that the arrangement between the Appellant and the CBU was in the nature of consortium for earning profit from operation of beer manufacture and supply, necessitated by the regulations governing the supply of beer. That the Authority erred in not following the settled positions as cited in the relied upon decisions above wherein it was held that the activity of permitting the CBU to manufacture alcoholic beverages on behalf of the principal does not amount to rendering of taxable service under the category of IPR service. The AAAR interpreted the scope of supply as per section 7 and charging section 9 of the GST law. While section 9 clearly excludes the supply of alcoholic liquor for human consumption, but the activities and role of par

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s the character of permitting the use of intellectual property rights, or of being a franchise service, at other times it takes on the colour and character of being secondment of personnel. The varied nature in the character of the services supplied by the Appellant, makes it difficult to determine the pre-dominancy in terms of characterisation since the consideration for some elements of the supply is being received in terms of a variable amount. Since, the activity which the Appellant engages in with respect to contract does not essentially change, hut the volume of consideration can change in each tax period, it does pose a challenge in terms of giving one particular nomenclature to the activities of the Appellant that would remain unchanged over all tax periods. There is a standard rate of 18% which applies across the whole range of services that are taxed under GST. However, this fact of having one pre-dominant supply that may be constant across tax periods, does not do anything t

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Code 999799 as other services nowhere else classified . The amounts received by the Appellant from the contracting units under the Agreement, in the nature of brand fee and reimbursement of expenses, is termed as a consideration for the supply of service and is chargeable to GST at the applicable rate of 18%. End Note To conclude, it can be said that it is now settled from the advance ruling perspective that activities of contract bottling of beer shall be eligible to levy of GST @ 18%. However, an assessee may still knock the doors of High Court or Supreme Court by way of a writ petition. Further, since we have now an AAAR affirmed advance ruling which is atleast binding on the applicant and its jurisdictional tax officer, it indicates that the same analogy would apply to other bottling activities like alcoholic liquor (other than beer), pharma, FMCG and other industries where such arrangements are in vogue. This would also be used as a guidance, though not a binding precedent, by the

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Customs – Instruction No. 20/2018 – Dated:- 26-11-2018 – Instruction No. 20/2018-Customs F. No. 450/119/2017-Cus IV(Pt.I) Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes& Custom) Room No. 227B, North Block New Delhi, dated the 26th November, 2018 To All Principal Chief Commissioner/Chief Commissioner of Customs/ Customs (Preventive), All Principal Chief Commissioner/ Chief Commissioner of Customs and GST, All Principal Commissioner/ Commissioner of Customs/ Customs (Preventive) Sub: Refund of IGST paid on exports of goods done from Non-EDI sites-reg. Sir/Madam, The procedure for refund of IGST paid on export of goods under Rule 96 of CGST Rules 2017 was provided vide instruction 15/2017-Cu

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he verified SBs after these are matched with the GST Returns data received from GSTN; (iv) Detailed advisories have been issued from time to time on these steps. Further, a public enquiry has been made available on ICEGATE website for checking the details and IGST status of manual SBs verified in ICES. (v) Specific IGST related errors or mismatches can also be checked by an importer/Customs Broker for his SBs using his ICEGATE login. (vi) It is only when a SB is verified by the Customs officer in ICES does it become ready for the IGST validation procedure. (vii) Data has been uploaded in ICES for verification of exports made upto March 2018. However, some sites have not yet sent the data by email for some months and ADG (ICES) has reminded

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2018 (11) TMI 1573 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2019 (20) G. S. T. L. 110 (A. A. R. – GST) – Erection of a series of transmission towers and commissioning of the transmission line – Supply of a bundle of goods and services – Works contract – Composite supply or not – whether the Tower Package, which includes the erection of a series of transmission towers and commissioning of the transmission line, is an immovable property?
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Held that:- Neither the risk in the goods passes to PGCIL at the factory gate nor that the JV will get any payment, other than the advances paid, until and unless the goods are dispatched. Evidently, property in the goods does not pass to PGCIL at the factory gate. The JV needs to move the goods and deliver them at the work site before claiming 60% of the payment for execution of the First Contract. The balance amount is to be paid in phases till completion of erection of all towers of the transmission line.
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ing made under two separate agreements, they are not executable separately. The First Contract for supply of goods cannot be executed unless tied up with the Second Contract. Unless and until supplies under both the contracts are made and the Tower Package is commissioned, PGCIL is not treating either of the contracts as successfully completed and reserves the right to initiate actions for breach of contract.
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It is thus a single source contract for bundled supplies of goods and services for construction, erection and commissioning of the Tower Package – an immovable property.
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The Applicant is executing an indivisible composite contract for construction, erection and commissioning of an immovable property, namely the Tower Package, execution of which involves bundled supply of both goods and services. It is, therefore, works contract, as defined under Section 2(119) of the GST Act – The contract for the Tower Package, being works contract is service in terms of paragraph 6(a

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nd in-transit insurance. GST is to be paid on the entire value of the works contract, including the supply of materials, transportation, intransit insurance, erection, commissioning etc.
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The exemption under serial no. 18 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 is, therefore, not applicable in the present context. – Case No. 25 of 2018 Order No. 22/WBAAR/2018-19 Dated:- 26-11-2018 – VISHWANATH AND PARTHASARATHI DEY MEMBER Applicant s representative heard Sonam Bhandari, FCA 1. The Applicant, stated to be engaged in the manufacturing, installation and other ancillary services of integrated transmission towers has entered into a Joint Venture (hereinafter referred to as JV ) with M/s C & C Constructions Ltd, Gurgaon, and, as JV has executed a contract with M/s Power Grid Corporation of India (hereinafter referred to as PGCIL ) for construction and commissioning of 400 kV D/C (Quad) Jigmeling-Alipurduar line (Indian portion – NER) under transmission syste

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= 2018 (5) TMI 964 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL in which this Authority has held that EMC Ltd has not contracted separately for ex-factory supply of materials, but for the composite supply, namely works contract service for construction, erection and commissioning of the Tower Package, of which freight and transportation is merely a component and not a separate and independent identity, and GST is to be paid at 18% on the entire value of the composite supply, including supply of materials, freight and transportation, erection, commissioning etc. The Applicant states that while the modus operandi of entering into a contract with PGCIL is similar to that adopted by EMC Ltd, insofar as the contract with PGCIL has been split up into two separate parts – one for ex-factory supply of materials (hereinafter referred to as the First Contract ), and the other for supply of allied services like erection of towers, testing and commissioning of transmission lines etc. (hereinafter

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location without major damage, and such shifting of towers is not an uncommon event. Transmission towers are, therefore, not immovable property. Judgments passed by the High Courts and the Supreme Court in the cases of Essar Telecom Infrastructure Pvt Ltd [(2012) 25 STR 16 (Kar)] = 2011 (4) TMI 234 – KARNATAKA HIGH COURT; Sri Velayuthaswamy Spinning Mills (P) Ltd (WP Nos. 4434, 4435, 13652, 13653 of 2009) = 2013 (3) TMI 681 – MADRAS HIGH COURT; Solid & Correct Engineering Works [(2010) 252 ELT 481 (SC)] = 2010 (4) TMI 15 – SUPREME COURT are referred to by the Applicant in support of his Argument. 3. On a careful reading of the contracts between the JV and PGCIL it is seen that, in the present context, the contractual obligation between the JV and PGCIL is for construction, erection and commissioning of the Tower Package and not for the erection of a standalone tower. It includes fabrication and supply of all types of transmission line towers and accessories, supply of earth wire, h

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owers that the Applicant would like the question to be confined to. It is clearly a supply of a bundle of goods and services that result in construction, erection and commissioning of the Tower Package. It, therefore, needs to be ascertained whether the Tower Package, which includes the erection of a series of transmission towers and commissioning of the transmission line, is an immovable property. 4. Immovable property is not defined under the GST Act. The term goods is defined under Section 2(52) of the GST Act as all kinds of moveable properties other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Property other than goods, money and securities should, therefore, be considered as immovable property under the GST Act. However, in the absence of a definitive explanation under the GST Act, recourse is being taken to other allied A

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fastened to anything attached to the earth, or forming part of the land and not agreed to be severed before supply or under a contract of supply. 5. In Triveni Engineering & Industries Ltd [(2000) 120 ELT 273 (SC)] = 2000 (8) TMI 86 – SUPREME COURT OF INDIA the Apex Court observes that while determining whether an article is permanently fastened to anything attached to the earth both the intention as well as the factum of fastening has to be ascertained from the facts and circumstances of each case. In S/S Triveni N L Ltd [RN – 910, 911 & 912 of 2001 (All)] = 2014 (4) TMI 842 – ALLAHABAD HIGH COURT Allahabad High Court observes that permanently fastened to anything attached to the earth has to be read in the context for the reason that nothing can be fastened to the earth permanently so that it can never be removed. If the article cannot be used without fastening or attaching it to the earth and is not removed under ordinary circumstances, it may be considered permanently faste

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ment in perpetuity with no plan for removal or shifting in the foreseeable future. The Tower Package being constructed is, therefore, an immovable property. 7. The Applicant has referred to several case laws and judgments in support of the argument that the Towers, so constructed under contract, are not immovable property . a) In Sri Velayuthaswamy Spinning Mills P Ltd (supra) the Madras High Court based its judgment on Section 3 of the Transfer of Property Act, 1882, and held that a windmill is a moveable property, being of the view that if a thing is embedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, it becomes an immovable property. On the other hand, if the attachment is made for the beneficial enjoyment of the chattel itself, which in this case is the windmill, then it remains a chattel even though fixed for the time being so that it may be enjoyed. This view of the Madras High Court does not take into c

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not, has held that such an attachment without necessary intent to making it permanent cannot be an immovable property. The emphasis is on the intention of the party. The Apex Court observes that the machine in question can be moved and has indeed been moved after the road construction and repair project, for which it was installed, is completed. However, if a machine is intended to be fixed permanently to a structure embedded in the earth, the moveable character of the machine, according to the Supreme Court, becomes extinct. In the present context, it has already been pointed out that the series of transmission towers are being erected under the Tower Package with no intention of removing or shifting them in foreseeable future. They are, therefore, clearly intended to be fixed permanently to the foundation embedded in the earth. The moveable character of the towers, therefore, becomes extinct. c) In the case of Essar Telecom Infrastructure Pvt Ltd (supra), the Karnataka High Court, d

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se in perpetuity. In contrast to the time-bound nature of the agreements for using building spaces for erecting mobile towers, the Tower Package is not being constructed with the contemplation of such relocation. The judgment of Karnataka High Court in the matter of Essar Telecom Infrastructure P Ltd (supra) is, therefore, not applicable in the present context. 8. The Applicant further argues that separate contracts, executed with the explicitly defined separate scope of work and price, should be construed as separate distinct agreements with each of the supplies being separate supplies and refers to several judgments in support of his argument. The cases referred to are: Hindustan Aeronautics Ltd [(1984) SCR (2) 248] = 1983 (12) TMI 259 – SUPREME COURT OF INDIA; Gannon Dunkerley & Co [(1959) SCR 379] = 1958 (4) TMI 42 – SUPREME COURT OF INDIA; Associated Hotels of India [(1972) SCR (2) 937] = 1972 (1) TMI 80 – SUPREME COURT OF INDIA; Power Grid Corporation of India Ltd [(2007) 112

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ctee. In this connection the Applicant refers to a Ruling of Karnataka Authority for Advance Ruling (hereinafter referred to as KAAR ) in the case of M/s Giriraj Renewables Pvt Ltd. wherein the contract is for setting up a solar power plant, where the contractee imports the solar photovoltaic module (PV Module) and supplies them free of cost to the contractor at the work site. The Ld KAAR observes that the contractor cannot, therefore, claim that he is supplying the PV Module and the other supplies are ancillary to this principal supply. As the goods belong to the contractee at the time of provisioning the services, it cannot be said that the supplies of materials and services are naturally bundled and a composite supply. Drawing an analogy the Applicant argues that ex-works supply of materials results in the transfer of title of the goods to PGCIL at the factory gate, and all subsequent activities, including transportation etc., are services performed on the goods supplied by the cont

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ex-works price component of the fabricated tower parts/tower shall be paid on completion of their erection. Final payment of the balance 10% shall be made after the erection of all the towers of the transmission line subject to submission of an unconditional and irrevocable bank guarantee covering the above 10% amount, valid till scheduled date for testing and commissioning of the transmission line. If there is an increase in Contract price due to price adjustment, 90% of it shall be paid on receipt of the respective shipment at the site. Appendix-3 to the First Contract describes the Insurance Requirements. It mandates the JV to provide insurance cover for the transit risk from the manufacturing works of the JV to the project warehouse at final destination and also the risk from the date of receipt at the site and till the date of operational acceptance, indicating that PGCIL does not own up risk in the goods till they are applied to construction, erection and commissioning of the Tow

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ation of the goods at the time when movement of the goods terminates for delivery to PGCIL or moved to the site for assembly or installation [refer to Section 10(1)(a) & (d) of the IGST Act, 2017]. The First Contract, however, does not include the provision and cost of such transportation and delivery. It, therefore, does not amount to a contract for supply of goods unless tied up with the Second Contract. In other words, the First Contract has no leg unless supported by the Second Contract. It is no executable contract unless tied up with the Second Contract. The contractee is aware of such interdependence of the two contracts. Although awarded under two separate agreements, clauses under both of them make it abundantly clear that notwithstanding break-up of the contract price, the contract shall, at all times, be construed as a single source responsibility contract and the Applicant shall remain responsible to ensure execution of both the contracts to achieve successful completio

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wo neatly separable contracts, where provisioning of services under the Second Contract begins subsequent to transfer of property in the goods to PGCIL under the First Contract, but are indivisible contracts for the bundled supply of goods and services. The ruling of KAAR in the matter of M/s Giriraj Renewables Pvt Ltd is, therefore, not relevant in the present context. It is thus a single source contract for bundled supplies of goods and services for construction, erection and commissioning of the Tower Package – an immovable property. 11. The Applicant s reference to several judgments of the apex court is also of little relevance since they are all delivered in the context of situations prior to the 46th Amendment to the Constitution, and are focused on devising the parameters to distinguish between a contract for the sale of goods and works contract. A careful reading of these judgments reveals that the prevailing view of the Apex Court at that time was that no straitjacket formula

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a three-member Constitution Bench of the Apex Court sums it up, describing works contract as a composite contract involving contracts for both service and sale of goods irrespective of dominant intention. Rejecting the traditional view espoused by several earlier judgments of the same court, wherein the focus lied on examining the substance of the contract, Apex Court now holds that the distinction between a contract for the sale of goods and contract for service has almost diminished in the matter of such composite contracts. All that is required is the existence of a contract for construction, erection, commissioning etc. of an immovable property, and execution of the contract must involve the transfer of property in goods (as goods or in some other form), whether or not the goods have been transferred by way of accretion. In its judgment dated 06/05/2014 in Kone Elevator India Pvt Ltd [Writ Petition (Civil) No. 232/2005 and other cases = 2014 (5) TMI 265 – SUPREME COURT], a five mem

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ction, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Discussion in the preceding paragraphs establishes that the Applicant is executing an indivisible composite contract for construction, erection and commissioning of an immovable property, namely the Tower Package, execution of which involves bundled supply of both goods and services. It is, therefore, works contract, as defined under Section 2(119) of the GST Act. 13. The contract for the Tower Package as above, being works contract is service in terms of paragraph 6(a) to Schedule II to the GST Act. Activities covered under Schedule II are to be treated as a supply of the nature described under section 7(1)(d) of the GST Act. Reference to Circular No. 47/21/2018-GST dated 08/06/2018 of CBIC or the e-flyer is, theref

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2018 (11) TMI 1574 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2019 (20) G. S. T. L. 119 (A. A. R. – GST) – Supply of Services or not – applicant is affiliated to International Inner Wheel and the administrative body for all Inner Wheel Clubs spread in 27 Inner Wheel Districts all over India – whether the activities undertaken by them may be termed “business” or not – Held that:- The Inner Wheel Clubs have specific objectives and members are granted various facilities and/or benefits, enabling them to attend conventions/meetings for the furtherance of the objectives of the Organisation, against subscriptions or fees, renewable annually – It appears that the fund collected is mainly spent on organising meetings and conventions like Triennial etc. Clearly, such meetings and gatherings provide facilities and benefits to the members in the form of a platform for social mixing, networking, promotion of friendship etc.
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The term “business” under the GST Act includes, under Section 2(

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6 under the category ‘Advertising services’.
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Sale of souvenirs is to be treated as a supply of goods.
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Ruling:- The Applicant’s activities involve supply of services classifiable under SAC Heading 99959 against consideration received in the form of subscription and membership fees.
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Services classifiable under SAC Heading 99836 are also supplied.
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Sale of souvenirs is to be considered as a supply of goods.
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The nature of supply for miscellaneous income as recorded in the Financial Accounts is to be determined by the nature of the supply. – Case No. 24 of 2018 Order No. 23/WBAAR/2018-19 Dated:- 26-11-2018 – VISHWANATH AND PARTHA SARATHI DEY MEMBER Present for the Applicant Vinay Kumar Shraff, Advocate 1. The Applicant, stated to be affiliated to International Inner Wheel and the administrative body for all Inner Wheel Clubs spread in 27 Inner Wheel Districts all over India (two of which fall within West Bengal), seeks a Ruling on whether the activities that ar

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ation is, therefore, admitted. 2. The Application states that the Applicant is affiliated to International Inner Wheel, one of the largest women s service voluntary organisations in the world active in more than 103 countries, and the organisation is involved in social welfare work with the aim of helping people live better lives. Members of the Clubs which fall under the Applicant organize events which combine personal service, fundraising, fellowship and fun, united by friendship and to serve the local community. They provide financial and other practical support to the financially disadvantaged classes, including people suffering from natural disaster or in war-torn regions. The club accumulates funds through subscriptions, sponsorship fees, the sale of souvenirs etc. The Application also states that if the Association dissolves the liabilities and assets will be distributed to other organisations having like objectives. The Clubs which fall under the Applicant do not provide any fa

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the GST Act defines the scope of supply as below: …..the expression supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as a supply of goods or supply of services as referred to in Schedule II. 4. The Application, as well as the literature subsequently submitted by the Applicant regarding the Constitution, workings and objectives of the International Inner Wheel and the Bye-Laws of the Association of Inner Wheel Clubs in India, the Applicant, does not provide for any import of services , nor for any of the supplies of goods or services, with or without consideratio

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itation Fees. It is also seen that each Club of Inner Wheel is required to pay the International Inner Wheel such Annual Capitation Fee for each member as shall be determined from time to time at the annual Convention, or, if in the years between, the inflation of the pound sterling makes a Capitation Fee increase necessary, the Governing Body is authorised to increase the Capitation Fee with the same percentage as the increase in the cost of living index in the UK, but not exceeding 5%. The Applicant, as a National Governing body of, and, being affiliated to the International body, is bound by these laws. And the Applicant s bye-laws also mention the annual subscription fees payable by each member. Voting rights are withdrawn from Clubs in arrears with dues. Similar requirements regarding Membership fees and/or subscriptions and voting powers are in the District Committee Rules as well as in the Club Rules. As per the information available in the public domain, members of Inner Wheel

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Club or District or the National Governing Body to the National Treasure. The Applicant s Income and Expenditure and Receipts and Payments Accounts for FY 18 and the Balance Sheet as on March 31, 2018, provide an idea of the nature of financial transactions made by the Inner Wheel Clubs. It appears that the fund collected is mainly spent on organising meetings and conventions like Triennial etc. Clearly, such meetings and gatherings provide facilities and benefits to the members in the form of a platform for social mixing, networking, promotion of friendship etc. 8. The term business under the GST Act includes, under Section 2(17), subclause (e) provision by a club, association, society, or any other body (for a subscription or any other consideration) of the facilities or benefits to its members. It is, thus, clear that the Applicant is doing business as defined under section 2(17)(e) of the GST Act. The subscription and membership fee is to be considered as consideration for the sup

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tions regarding these activities are, therefore, business transactions within the meaning of section 2(17)(b), being transactions undertaken in connection with or incidental or ancillary to the social welfare activities of the Applicant, and are supplies in terms of Section 7(1) of the GST Act. Such services are classifiable under SAC Heading 99836 under the category Advertising services . Sale of souvenirs is to be treated as a supply of goods. 11. The decision of the apex court in Sai Publication Fund (supra) is clearly not applicable in the present context, as the main activity is to be treated as a business. In view of the foregoing, we rule as below RULING 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 miscellan

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2018 (12) TMI 295 – ALLAHABAD HIGH COURT – TMI – Release of Goods – goods seized on account of improper invoice in respect of some of the builites – Held that:- Since the petitioner is the selling dealer and the sale transaction has not attained finality, he continues to be the owner of the goods and is therefore entitle for the release the same in accordance with the provisions of Section 129 (1) (a) of the Act.
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Penalty – Held that:- The penalty order has nothing to do with the order of the release and it can be challenged in the appropriate forum independently.
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Petition disposed off. – Writ Tax No. – 1480 of 2018 Dated:- 26-11-2018 – Pankaj Mithal And Pankaj Bhatia JJ. For the Petitioner : Shubham Agrawal For the Respondent

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e Act alone could have been demanded. Since the petitioner is the selling dealer and the sale transaction has not attained finality, he continues to be the owner of the goods and is therefore entitle for the release the same in accordance with the provisions of Section 129 (1) (a) of the Act. Sri Tripathi submits that a penalty order has already been passed. The penalty order has nothing to do with the order of the release and it can be challenged in the appropriate forum independently. In view of the aforesaid facts and circumstances, we dispose of the writ petition with the direction to the petitioner to deposit the tax & penalty and to furnish security & indemnity bond in accordance with the provisions of Section 129 (1) (a) of t

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GST – States – 19721-309-21/2018 – Dated:- 26-11-2018 – MADHYA PRADESH ORDINANCE NO.11 OF 2018 THE MADHYA PRADESH GOODS AND SERVICES TAX (AMENDMENT) ORDINANCE, 2018 First published in the Madhya Pradesh Gazette (Extra-ordinary) . dated the November, 2018. Promulgated by the Governor of Madhya Pradesh in the sixty-ninth year of the Republic of India, An Ordinance further to amend the Madhya Pradesh Goods and Services Tax Act, 2017 (No. 19 of2017). Whereas the State Legislature is not in session and the Governor of Madhya Pradesh is satisfied that circumstances exist which render it necessary for him to take immediate action; Now, therefore, in exercise of the powers conferred by clause (1) of article 213 of the Constitution of India, the Governor of Madhya Pradesh is pleased to promulgate the following Ordinance:- Short title and commencement. 1. (1) This Ordinance may be called the Madhya Pradesh Goods and Services Tax (Amendment) Ordinance, 2018. (2) Save as otherwise provided, the p

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substituted; (b) in clause (16) for the words Central Board of Excise and Customs , the words Central Board of Indirect Taxes and Customs shall be substituted; (c) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely:- (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and ; (d) clause (18) shall be omitted; (e) with effect from the 1st day of July, 2017 clause (21) shall be deemed to have been omitted; (f) with effect from the 1st day of July, 2017 clauses (22) to (111) shall be deemed to have been renumbered as clauses (21) to (110) respectively; (g) in clause (35) as so renumbered, for the word, bracket and letter clause (c) , the word, bracket and letter clause (b) shall be substituted; (h) in clause (69) so renumbered, in sub-clause (f), after the word and figure article 371 , the words, figure and letter and article 371J shall be inserted; (i) in clause

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e been inserted; (ii) in clause (c), after the words a consideration , the word and shall be omitted and shall always be deemed to have been omitted; (iii) clause (d) shall be omitted and shall always be deemed to have been omitted; (b) after sub-section (1), the following sub-section shall be inserted and shall always be deemed to have been inserted, namely:- (1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. ; (c) in sub-section (3), for the words, brackets and figures sub-sections (1) and (2) , the words, brackets, figures and letter sub-sections (1), (IA) and (2) shall be substituted. Amendment of section 9. 6. In section 9 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:- (4) The Government may, on the recommendations of the Council, by notification, specify a clas

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n who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent of turnover in a State in the preceding financial year or five lakh rupees, whichever is higher. ; (b) in sub-section (2), for clause (a), the following clause shall be substituted, namely:- (a) save as provided in sub-section (1), he is not engaged in the supply of services; . Amendment of section 12 8. In section 12 of the principal Act, in sub-section (2), in clause (a), the words, bracket and figure sub-section (1) of shall be omitted. Amendment of section 13 9. In section 13 of the principal Act, in sub-section (2), the words, brackets and figure sub-section (2) of occurring at both the places, shall be omitted. Amendment of section 16 10. In section 16 of the principal Act, in sub-section (2),- (a) in clause (b), for the Explanation, the following Explanation shall be substituted, nam

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Schedule III, except those specified in paragraph 5 of the said Schedule. ; (b) in sub-section (5), for clauses (a) and (b), the following clauses shall be substituted, namely:- (a) 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 making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa)vessels and aircraft except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; (ii) for transportation of goods; (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft

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ervices or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply; (ii) membership of a club, health and fitness centre; and (iii) travel benefits extended to employees on vacation such as leave or home travel concession: Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. . Amendment of section 20. 12. In section 20 of the principal Act, in the Explanation, in clause (c), for the words and figure under entry 84, , the words, figures and letter under entries 84 and 92A shall be substituted. Amendment of section 22. 13. In section 22 of the principal Act,- (a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely:- Provided further that the Government may, at the reque

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, the following proviso shall be inserted, namely:- Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State. ; (b) in sub-section (2), for the existing proviso, the following proviso shall be substituted, namely:- Provided that a person having multiple places of business in a State may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed. . Amendment of section 29. 16. In section 29 of the principal Act,- (a) for the marginal heading, the following marginal heading shall substituted, namely:- Cancellation or suspension of Registration. ; (b) in sub-section (l), after clause (c), the following proviso shall be inserted, namely:- Provided that during pendency of the proc

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or more debit notes for supplies made in a financial year shall be substituted. Amendment of section 35. 18 In section 35 of the principal Act, in sub-section (5), the following proviso shall be inserted, namely:- Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force. . Amendment of section 39. 19. In section 39 of the principal Act,- (a) in sub-section (1),- (i) for the words in such form and manner as may be prescribed , the words in such form, manner and within such time as may be prescribed shall be substituted; (ii) the words on or before the twentieth day of the month succeeding such calendar month or part thereof shall be omitted; (iii) the following proviso shall be inserted, name

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hat no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier. . Insertion of section 43A. 20. After section 43 of the principal Act, the following section shall be inserted, namely:- 43A. Procedure for furnishing return and availing input tax credit. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers. (2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed. (3)

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ch the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished. (7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees. (8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,- (i) within six months of taking registration; (ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed. . Amendment of section 48. 21. In section 48 of the principal Act, in sub-section (2), after the words and figures return under section 39 or section 44 or section 45 , the words and to perform such other functions sha

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ilisation of input tax credit subject to certain conditions. Notwithstanding anything contained in section 49, the input tax credit on account of State tax shall be utilised towards payment of integrated tax or State tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment. 49B. Order of utilisation of input tax credit. Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax. . Amendment of section 52. 24. In section 52 of the principal Act, in sub-section (9), for the word and figures section 37 , the words and figures section 37 or section 39 shall be subs

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Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of State tax to search and seize or may himself search and seize such goods, documents or books or things: . Amendment of section 79. 27. In section 79 of the principal Act, after sub-section (4), the following Explanation shall be inserted, namely:- Explanation.-For the purposes of this section, the word person shall include distinct persons as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25. . Amendment of section 107. In section 107 of the principal Act, in sub-section (6), for clause (b), the following clause shall be substituted, namely:- (b) a sum equal to ten per cent of the remaining amount of

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value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (b) in sub-section (6), for the words seven days , the words fourteen days shall be substituted. Amendment of section 140. 31. With effect from the 1st day of July, 2017, in section 140 of the principal Act,- (a) in sub-section (4), for the opening paragraph, the following paragraph shall be substituted, namely:- A registered person, who was engaged in the sale of taxable goods as well as exempted goods or tax free goods, by whatever name called, under the existing law but which are liable to tax under this Act, shall be entitled to take, in his electronic credit ledger,- ; (b) in sub-section (6), for the opening paragraph, the following paragraph shall be substituted, namely:- A registered person, who was either paying tax at a fixed rate or paying under the existing law shall be entitled to take, in his electronic credit ledger, cre

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, for clause (a), the following clause shall be substituted, namely:- (a) Every proceeding of appeal, revision, review or reference relating to any output tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. . Amendment of section 143. 33. In section 143 of the principal Act, in sub-section (1), in clause (b), after the proviso, the following proviso shall be inserted, namely:- Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively. . Amendme

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successive sessions aforesaid, the State Legislature agrees in making any modification in the rule or regulation or in the notification, as the case may be, or the State Legislature agrees that the rule or regulation or the notification should not be made, the rule or regulation or notification, as the case may be, shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation or notification, as the case may be. . Amendment of section 174. 36. With effect from 1st day of July, 2017, for section 174 of the principal Act, – (a) in sub-section (2), for clause (f), the following clause shall be substituted, namely:- (f) affect any proceedings including that relating to an appeal, revision, review or reference, instituted before, on or after the appointed day under the said amended Act or repealed Acts or

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