Author: admin_gst

GST – States – CCW/GST/74/2015 – Dated:- 17-9-2018 – Government of Andhra Pradesh Commercial Taxes Department Proceedings of the Chief Commissioner of State Tax, Andhra Pradesh Present: Sri. J. Syamala Rao, I.A.S. CCTs Ref.in CCW/GST/74/2015 Dt.17.09.2018 Order under SGST: Subject: Extension of time limit for submitting the declaration in FORM GST TRAN-I under rule 117(1A) of the Andhra Pradesh Goods and Service Tax Rules, 2017 in certain cases In exercise of the powers conferred by sub-rule (1

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2018 (11) TMI 1084 – CESTAT CHENNAI – TMI – Non-discharge of service tax – demand of service tax has been confirmed by the Commissioner in the revision order merely basing upon the documents recovered from SCV – Held that:- There is no evidence brought out that the appellant has provided services to 550 customers and no investigation has been done at the level of customers’ end. So also there is no document to show that the appellant has received charges for all the connections provided by him.
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Service tax can be demanded only on a consideration received by the service provider – Since there is no evidence to establish that the appellants have received consideration for all 550 connections, the demand raised by assuming that the appellant has provided 550 connections to various subscribers is without any factual basis.
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Appeal allowed – decided in favor of appellant. – Appeal No. ST/271/2010 – Final Order No. 42442/2018 – Dated:- 17-9-2018 – Ms. Sulekha Beevi C.S., Member

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ow cause notice. After adjudication, the revision order dated 24.2.2010 was passed by the revisionary authority confirming the demand of balance service tax of ₹ 3,44,248/- and imposed penalty of ₹ 3,66,558/- under section 78 of the Act. Hence the appellant is before this Tribunal. 2. The ld. counsel Shri Vadivalagai Nambi appeared and argued the matter. He submitted that the demand has been raised without any basis. The appellant was providing cable operator service and the adjudicating authority after analyzing the evidence available had dropped the demand of ₹ 3,44,248/- and had confirmed an amount of ₹ 25,572/- only. The Commissioner in the revision order has relied upon documents seized from SCV to arrive at the total taxable value which is highly erroneous. He submitted that the records received from SCV showed that 550 connections were taken by the appellant and based upon such figures have arrived at the total tax of ₹ 3,44,248/-. Merely by assumin

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ade before us as well as the records, we are able to see that the demand of service tax has been confirmed by the Commissioner in the revision order merely basing upon the documents recovered from SCV. In the registers recovered, it was seen that the appellant had taken 550 connections and paid the amount calculated at ₹ 20/- per connection for a month as charges to KTV. Thus department has assumed that the appellants have provided 550 connections of KTV, a pay channel to various subscribers. There is no evidence brought out that the appellant has provided services to 550 customers and no investigation has been done at the level of customers end. So also there is no document to show that the appellant has received charges for all the connections provided by him. Service tax can be demanded only on a consideration received by the service provider. Since there is no evidence to establish that the appellants have received consideration for all 550 connections, we are of the view tha

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GST – States – (04-S/2017) No. FD 47 CSL 2017 – Dated:- 17-9-2018 – FINANCE SECRETARIAT NOTIFICATION(4-S/2017) No. FD 47 CSL 2017, Bengaluru, dated: 17/09/2018 In exercise of the powers conferred by Section 164 of the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act 27 of 2017), on the recommendation of Goods and Services Tax Council, the Government of Karnataka hereby makes the following rules further to amend the Karnataka Goods and Services Tax Rules, 2017, namely: – 1. Title and commencement.- (1) These rules may be called the Karnataka Goods and Services Tax (Ninth Amendment) Rules, 2018. (2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette. 2. Amendment of rule 22.- In the Karnataka Goods and Services Tax Rules, 2017, (hereinafter referred to as the said rules), in rule 22, in sub-rule (4), the following proviso shall be inserted, namely:- "Provided that where the person instead of replyi

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, the words "or in batches or lots" shall be inserted. 5. Amendment of rule 89.- In the said rules, in rule 89, in sub-rule (4), for clause (E), the following clause shall be substituted, namely :- '(E) "Adjusted Total Turnover" means the sum total of the value of- (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services ; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non zero-rated supply of services, excluding- (i) the value of exempt supplies other than zero-rated supplies; and (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any, during the relevant period'. 6. Amendment of rule 96.- In the said rules, with effect from the 23rd October, 2017, in rule 96, for sub-rule (10), the following sub-rule shall be substituted, namely :- "(10) The persons claiming refund

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ion 3, Sub-section (i), vide number G.S.R 1272 (E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R 1299 (E), dated the 13th October, 2017". 7. Amendment of rule 117.- In rule 117 of the said rules,- (i) after sub-rule (1), the following shall be inserted, namely:- (1A) Notwithstanding anything contained in sub-rule (1), the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-I by a further period not beyond 31st March 2019, in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extention. (ii) in sub-rule (4), in clause (b), after sub-clause (iii), the following proviso shall be inserted,

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e Notice No. Date- Order for dropping the proceedings for cancellation of registration This has reference to your reply filed vide ARN dated in response to the show cause notice referred to above. Upon consideration of your reply and/or submissions made during hearing, the proceedings initiated for cancellation of registration stands vacated for the following reasons : <<text>> or The above referred show cause notice was issued for contravention of the provisions of clause (b) or clause (c) of sub-section (2) of section 29 of the Central Goods Services Tax Act, 2017. As you have filed all the pending returns which were due on the date of issue of the aforesaid notice, and have made full payment of tax along with applicable interest and late fee, the proceedings initiated for cancellation of registration are hereby dropped. Signature Name of the Officer Designation Jurisdiction Place : Date : ". 11. Substitution of FORM GST ITC-04.- For FORM GST ITC-04, of the said ru

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e of challan issued by job worker under which goods have been received back Description of goods UQC Quantity Original challan No. under which goods have been sent for job work Original challan date under which goods have been sent for job work Nature of job work done by job worker Losses & wastes UQC Quantity 1 2* 3* 4 5 6 7* 8* 9 10 11 (B) Details of inputs / capital goods received back from job worker other than the job worker to whom such goods were originally sent for job work ; and losses and wastes : STIN/State of job worker if unregistered Challan No. issued by job worker under which goods have been received back Date of challan issued by job worker under which goods have been received back Description of goods UQC Quantity Original challan No. under which goods have been sent for job work Original challan date under which goods have been sent for job work Nature of job work done by job worker Losses & wastes UQC Quantity 1 2* 3* 4 5 6 7* 8* 9 10 11 (C) Details of input

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ds sent for job work and goods received back after job work is not possible. 6. Verification : I hereby solemnly affirm and declare that the information given hereinabove is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom. Place : Date : Signature Name of Authorised Signatory .. Designation/Status………………… ; 12. Insertion of new Forms GSTR-9, GSTR-9A, and GSTR-9C.- after FORM GSTR-8, of said rules, the following new FORMS GSTR-9, GSTR-9A, and GSTR-9C shall be inserted, namely :- "FORM GSTR-9 (See rule 80) Annual Return Pt. I Basic Details 1 Financial Year 2 GSTIN 3A Legal Name 3B Trade Name (if any) Pt. II Details of Outward and inward supplies declared during the financial year (Amount in ₹ in all tables) Nature of Supplies Taxable Value Central Tax State Tax/UT Tax Integrated Tax Cess 1 2 3 4 5 6 4 Details of advances, inward and outward supplies on which tax is payable as decla

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without payment of tax C Supplies on which tax is to be paid by the recipient on reverse charge basis D Exempted E Nil Rated F Non-GST supply G Sub-total (A to F above) H Credit Notes issued in respect of transactions specified in A to F above (-) I Debit Notes issued in respect of transactions specified in A to F above (+) J Supplies declared through Amendments (+) K Supplies reduced through Amendments (-) L Sub-Total (H to K above) M Turnover on which tax is not to be paid (G + L above) N Total Turnover (including advances) (4N + 5M – 4G above) Pt. III Details of ITC as declared in returns filed during the financial year Description Type Central Tax State Tax/UT Tax Integrated Tax Cess 1 2 3 4 5 6 6 Details of ITC availed as declared in returns filed during the financial year A Total amount of input tax credit availed through FORM GSTR-3B (sum total of Table 4A of FORM GSTR-3B) <Auto> <Auto> <Auto> <Auto> B Inward supplies (other than imports and inward suppli

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C as declared in returns filed during the financial year A As per Rule 37 B As per Rule 39 C As per Rule 42 D As per Rule 43 E As per section 17(5) F Reversal of TRAN-I credit G Reversal of TRAN-II credit H Other reversals (pl. specify) I Total ITC Reversed (A to H above) J Net ITC Available for Utilization (6O – 7I) 8 Other ITC related information A ITC as per GSTR-2A(Table 3 & 5 thereof) <Auto> <Auto> <Auto> <Auto> B ITC as per sum total of 6(B) and 6(H) above <Auto> C ITC on inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs) received during 2017-18 but availed during April to September, 2018 D Difference [A-(B+C)] E ITC available but not availed (out of D) F ITC available but ineligible (out of D) G IGST paid on import of goods (including supplies from SEZ) H IGST credit availed on import of goods (as per 6(E) above) <Auto> I Difference (G-H) J ITC available but not availe

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ration in 10 & 11 above Description Payable Paid 1 2 3 Integrated Tax Central Tax State/UT Tax Cess Interest Pt. VI Other Information 15 Particulars of Demands and Refunds Details Central Tax State Tax / UT Tax Integrated Tax Cess Interest Penalty Late Fee / Others 1 2 3 4 5 6 7 8 A Total Refund claimed B Total Refund sanctioned C Total Refund Rejected D Total Refund Pending E Total demand of taxes F Total taxes paid in respect of E above G Total demands pending out of E above 16 Information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis Details Taxable Value Central Tax State Tax/UT Tax Integrated Tax Cess 1 2 3 4 5 6 A Supplies received from Composition taxpayers B Deemed supply under Section 143 C Goods sent on approval basis but not returned 17 HSN Wise Summary of outward supplies HSN Code UQC Total Quantity Taxable Value Rate of Tax Central Tax State Tax/UT Tax Integrated Tax Cess 1 2 3 4 5 6 7 8 9 18 HSN Wise

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hich the annual return is filed. The details filled in Part II is a consolidation of all the supplies declared by the taxpayer in the returns filed during the financial year. The instructions to fill Part II are as follows : Table No. Instructions 4A Aggregate value of supplies made to consumers and unregistered persons on which tax has been paid shall be declared here. These will include details of supplies made through E-Commerce operators and are to be declared as net of credit notes or debit notes issued in this regard. Table 5, Table 7 along with respective amendments in Table 9 and Table 10 of FORM GSTR-1 may be used for filling up these details. 4B Aggregate value of supplies made to registered persons (including supplies made to UINs) on which tax has been paid shall be declared here. These will include supplies made through E-Commerce operators but shall not include supplies on which tax is to be paid by the recipient on reverse charge basis. Details of debit and credit notes

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e person filing the annual return) on reverse charge basis. This shall include supplies received from registered persons, unregistered persons on which tax is levied on reverse charge basis. This shall also include aggregate value of all import of services. Table 3.1(d) of FORM GSTR-3B may be used for filling up these details. 4I Aggregate value of credit notes issued in respect of B to B supplies (4B), exports (4C), supplies to SEZs (4D) and deemed exports (4E) shall be declared here. Table 9B of FORM GSTR-1 may be used for filling up these details. 4J Aggregate value of debit notes issued in respect of B to B supplies (4B), exports (4C), supplies to SEZs (4D) and deemed exports (4E) shall be declared here. Table 9B of FORM GSTR-1 may be used for filling up these details. 4K & 4L Details of amendments made to B to B supplies (4B), exports (4C), supplies to SEZs (4D) and deemed exports (4E), credit notes (4I), debit notes (4J) and refund vouchers shall be declared here. Table 9A an

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d here. Table 9B of FORM GSTR-1 may be used for filling up these details. 5I Aggregate value of debit notes issued in respect of supplies declared in 5A,5B,5C, 5D, 5E and 5F shall be declared here. Table 9B of FORM GSTR-1 may be used for filling up these details. 5J & 5K Details of amendments made to exports (except supplies to SEZs) and supplies to SEZs on which tax has not been paid shall be declared here. Table 9A and Table 9C of FORM GSTR-1 may be used for filling up these details. 5N Total turnover including the sum of all the supplies (with additional supplies and amendments) on which tax is payable and tax is not payable shall be declared here. This shall also include amount of advances on which tax is paid but invoices have not been issued in the current year. However, this shall not include the aggregate value of inward supplies on which tax is paid by the recipient (i.e. by the person filing the annual return) on reverse charge basis. 4. Part III consists of the details o

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rge basis shall be declared here. It may be noted that the total ITC availed is to be classified as ITC on inputs, capital goods and input services. Table 4(A)(3) of FORM GSTR-3B may be used for filling up these details. 6D Aggregate value of input tax credit availed on all inward supplies received from registered persons on which tax is payable on reverse charge basis shall be declared here. It may be noted that the total ITC availed is to be classified as ITC on inputs, capital goods and input services. Table 4(A)(3) of FORM GSTR-3B may be used for filling up these details. 6E Details of input tax credit availed on import of goods including supply of goods received from SEZs shall be declared here. It may be noted that the total ITC availed is to be classified as ITC on inputs and capital goods. Table 4(A)(1) of FORM GSTR-3B may be used for filling up these details. 6F Details of input tax credit availed on import of services (excluding inward supplies from SEZs) shall be declared he

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lared here. Details of ITC availed through FORM ITC-01 and FORM ITC-02 in the financial year shall be declared here. 7A, 7B, 7C, 7D 7E, 7F 7G, and 7H Details of input tax credit reversed due to ineligibility or reversals required under rule 37, 39,42 and 43 of the CGST Rules, 2017 shall be declared here. This column should also contain details of any input tax credit reversed under section 17(5) of the CGST Act, 2017 and details of ineligible transition credit claimed under FORM GST TRAN-I or FORM GST TRAN-II and then subsequently reversed. Table 4(B) of FORM GSTR-3B may be used for filling up these details. Any ITC reversed through FORM ITC -03 shall be declared in 7H. 8A The total credit available for inwards supplies (other than imports and inwards supplies liable to reverse charge but includes services received from SEZs) received during 2017-18 and reflected in FORM GSTR-2A (table 3 & 5 only) shall be auto-populated in this table. This would be the aggregate of all the input t

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ncluding imports from SEZs) during the financial year shall be declared here. 8H The input tax credit as declared in Table 6E shall be auto-populated here. 8K The total input tax credit which shall lapse for the current financial year shall be computed in this row. 5. Part IV is the actual tax paid during the financial year. Payment of tax under Table 6.1 of FORM GSTR-3B may be used for filling up these details. 6. Part V consists of particulars of transactions for the previous financial year but declared in the returns of April to September of current FY or date of filing of Annual Return for previous financial year (for example in the annual return for the FY 2017-18, the transactions declared in April to September 2018 for the FY 2017-18 shall be declared), whichever is earlier. The instructions to fill Part V are as follows : Table No. Instructions 10 & 11 Details of additions or amendments to any of the supplies already declared in the returns of the previous financial year bu

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onsists of details of other information. The instructions to fill Part VI are as follows: Table No. Instructions 15A 15B,15C & 15D Aggregate value of refunds claimed, sanctioned, rejected and pending for processing shall be declared here. Refund claimed will be the aggregate value of all the refund claims filed in the financial year and will include refunds which have been sanctioned, rejected or are pending for processing. Refund sanctioned means the aggregate value of all refund sanction orders. Refund pending will be the aggregate amount in all refund application for which acknowledgement has been received and will exclude provisional refunds received. These will not include details of non-GST refund claims. 15E, 15F, & 15G Aggregate value of demands of taxes for which an order confirming the demand has been issued by the adjudicating authority shall be declared here. Aggregate value of taxes paid out of the total value of confirmed demand as declared in 15E above shall be d

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and at four digits' level for taxpayers having annual turnover above ₹ 5.00 Cr. UQC details to be furnished only for supply of goods. Quantity is to be reported net of returns. Table 12 of FORM GSTR-1 may be used for filling up details in Table 17. 19. Late fee will be payable if annual return is filed after the due date. FORM GSTR-9A (See rule 80) Annual Return (For Composition Taxpayer) Pt. I Basic Details 1 Financial Year 2 GSTIN 3A Legal Name <Auto> 3B Trade Name (if any) <Auto> 4 Period of composition scheme during the year (From To ) 5 Aggregate Turnover of Previous Financial Year (Amount in ₹ in all tables) Pt.II Details of outward and inward supplies declared in returns filed during the financial year Description Turnover Rate of Tax Central Tax State/UT Tax Integrated tax Cess 1 2 3 4 5 6 7 6 Details of Outward supplies on which tax is payable as declared in returns filed during the financial year A Taxable B Exempted, Nil-rated C Total 7 Details

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is earlier Description Turnover Central Tax State Tax/UT Tax Integrated Tax Cess 1 2 3 4 5 6 10 Supplies/tax (outward) declared through Amendments (+) (net of debit notes) 11 Inward supplies liable to reverse charge declared through Amendments (+) (net of debit notes) 12 Supplies / tax (outward) reduced through Amendments (-) (net of credit notes) 13 Inward supplies liable to reverse charge reduced through Amendments (-) (net of credit notes) 14 Differential tax paid on account of declaration made in 10, 11, 12 & 13 above Description Payable Paid 1 2 3 Integrated Tax Central Tax State/UT Tax Cess Interest Pt. V Other Information 15 Particulars of Demands and Refunds Description Central Tax State Tax/UT Tax Integrated Tax Cess Interest Penalty Late Fee/Others 1 2 3 4 5 6 7 8 A Total Refund claimed B Total Refund sanctioned C Total Refund Rejected D Total Refund Pending E Total demand of taxes F Total taxes paid in respect of E above G Total demands pending out of E above 16 Details

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of the financial year previous to the year for which the return is being filed. For example for the annual return for FY 2017-18, the aggregate turnover of FY 2016-17 shall be entered into this table. It is the sum total of turnover of all taxpayers registered on the same PAN. 3. Part II consists of the details of all outward and inward supplies in the financial year for which the annual return is filed. The instructions to fill Part II are as follows : Table No. Instructions 6A Aggregate value of all outward supplies net of debit notes/credit notes, net of advances and net of goods returned for the entire financial year shall be declared here. Table 6 and Table 7 of FORM GSTR-4 may be used for filling up these details. 6B Aggregate value of exempted, Nil Rated and Non-GST supplies shall be declared here. 7A Aggregate value of all inward supplies received from registered persons on which tax is payable on reverse charge basis shall be declared here. Table 4B, Table 5 and Table 8A of F

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revious financial year (for example in the annual return for the FY 2017-18, the transactions declared in April to September 2018 for the FY 2017-18 shall be declared),whichever is earlier. The instructions to fill Part V are as follows : Table No. Instructions 10,11, 12,13, and 14 Details of additions or amendments to any of the supplies already declared in the returns of the previous financial year but such amendments were furnished in Table 5 (relating to inward supplies) or Table 7(relating to outward supplies) of FORM GSTR- 4 of April to September of the current financial year or upto the date of filing of Annual Return for the previous financial year, whichever is earlier shall be declared here. 5. Part V consists of details of other information. The instruction to fill Part V are as follows : Table No. Instructions 15A, 15B, 15C, and 15D Aggregate value of refunds claimed, sanctioned, rejected and pending for processing shall be declared here. Refund claimed will be the aggregat

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r filling up these details. 16B Aggregate value of all the credit availed when a registered person opts out of the composition scheme shall be declared here. The details furnished in FORM ITC-01 may be used for filling up these details. 17. Late fee will be payable if annual return is filed after the due date."; FORM GSTR-9C See rule 80(3) PART – A – Reconciliation Statement Pt. I Basic Details 1 Financial Year 2 GSTIN 3A Legal Name < Auto > 3B Trade Name (if any) <Auto > 4 Are you liable to audit under any Act? << Please specify >> (Amount in ₹ in all tables) Pt. II Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9) 5 Reconciliation of Gross Turnover A Turnover (including exports) as per audited financial statements for the State / UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) B Unbilled revenue at the beginning

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as declared in Annual Return (GSTR9) R Un-Reconciled turnover (Q – P) AT1 6 Reasons for Un – Reconciled difference in Annual Gross Turnover A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> 7 Reconciliation of Taxable Turnover A Annual turnover after adjustments (from 5P above) <Auto> B Value of Exempted, Nil Rated, Non-GST supplies, No-Supply turnover C D E F Zero rated supplies without payment of tax Supplies on which tax is to be paid by the recipient on reverse charge basis Taxable turnover as per adjustments above (A-B-C-D) < Auto > Taxable turnover as per liability declared in Annual Return (GSTR-9) G Unreconciled taxable turnover (F-E) AT 2 8 Reasons for Un-Reconciled difference in taxable turnover A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> Pt.III Reconciliation of tax paid 9 Reconciliation of rate wise liability and amount payable thereon Tax payable Descr

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nnual Financial Statement for the State/ UT (For multi-GSTIN units under same PAN this should be derived from books of accounts) B ITC booked in earlier Financial Years claimed in current Financial Year (+) C ITC booked in current Financial Year to be claimed in subsequent Financial Years (-) D ITC availed as per audited financial statements or books of account < Auto > E ITC claimed in Annual Return (GSTR9) F Un-reconciled ITC ITC 1 13 Reasons for un-reconciled difference in ITC A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> 14 Reconciliation of ITC declared in Annual Return (GSTR9) with ITC availed on expenses as per audited Annual Financial Statement or books of account Description Value Amount of Total ITC Amount of eligible ITC availed 1 2 3 4 A B C D E F G Purchases Freight / Carriage Power and Fuel Imported goods (Including received from SEZs) Rent and Insurance Goods lost, stolen, destroyed, written off or disposed of

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t Tax Credit Interest Late Fee Penalty Any other amount paid for supplies not included in Annual Return (GSTR 9) Erroneous refund to be paid back Outstanding demands to be settled Other (Pl. specify) Verification: I hereby solemnly affirm and declare that the information given herein above is true and correct to the best of my knowledge and belief and nothing has been concealed there from. **(Signature and stamp/Seal of the Auditor) Place: …………….. Name of the signatory …………………….. Membership No……………… Date: …………………….. Full address …………………………… Instructions : – 1. Terms used: (a) GSTIN:Goods and Services Tax Identification Number 2. The details for the period between July 2017 to March 2018 are to be provided in this statement for the financial year 2017-18.

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accounts in case of persons / entities having presence over multiple States. 5B Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting in the last financial year and was carried forward to the current financial year shall be declared here. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here. (For example, if rupees Ten Crores of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on rupees Four Crores of such revenue, then value of rupees Four Crores rupees shall be declared here) 5C Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall be declared here. 5D Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is alre

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5J Aggregate value of credit notes which have been accounted for in the audited Annual Financial Statement but were not admissible under Section 34 of the CGST Act shall be declared here. 5K Aggregate value of all goods supplied by SEZs to DTA units for which the DTA units have filed bill of entry shall be declared here. 5L There may be cases where registered persons might have opted out of the composition scheme during the current financial year. Their turnover as per the audited Annual Financial Statement would include turnover both as composition taxpayer as well as normal taxpayer. Therefore, the turnover for which GST was paid under the composition scheme shall be declared here. 5M There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 of the CGST Act, 2017 and rules thereunder. Therefore, any difference between the turnover reported in the Annual Return (GSTR 9) and turnover reported in the audited Annual Financial Sta

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R-9). 7A Annual turnover as derived in Table 5P above would be auto-populated here. 7B Value of exempted, nil rated, non-GST and no-supply turnover shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7C Value of zero rated supplies (including supplies to SEZs) on which tax is not paid shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7D Value of reverse charge supplies on which tax is to be paid by the recipient shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7E The taxable turnover is derived as the difference between the annual turnover after adjustments declared in Table 7A above and the sum of all supplies (exempted, non-GST, reverse charge etc.) declared in Table 7B, 7C and 7D above. 7F Taxable turnover as declared in Table 4N of the Annual Return (GSTR9) shall be declared here. 8 Reasons for non-reconciliation between adjus

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eturn (GSTR9). 10 Reasons for non-reconciliation between payable / liability declared in Table 9P above and the amount payable in Table 9Q shall be specified here. 11 Any amount which is payable due to reasons specified under Table 6, 8 and 10 above shall be declared here. 6. Part IV consists of reconciliation of Input Tax Credit (ITC). The instructions to fill Part IV are as under:- Table No. Instructions 12A ITC availed (after reversals) as per the audited Annual Financial Statement shall be declared here. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons / entities with presence over multiple States. Such persons / entities, will have to internally derive their ITC for each individual GSTIN and declare the same here. It may be noted that reference to audited Annual Financial Statement includes reference to books of accounts in case of persons / entities having presence over multiple States. 12B Any ITC which was boo

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ll be specified here. 14 This table is for reconciliation of ITC declared in the Annual Return (GSTR9) against the expenses booked in the audited Annual Financial Statement or books of account. The various sub-heads specified under this table are general expenses in the audited Annual Financial Statement or books of account on which ITC may or may not be available. Further, this is only an indicative list of heads under which expenses are generally booked. Taxpayers may add or delete any of these heads but all heads of expenses on which GST has been paid / was payable are to be declared here. 14R Total ITC declared in Table 14A to 14Q above shall be auto populated here. 14S Net ITC availed as declared in the Annual Return (GSTR9) shall be declared here. Table 7J of the Annual Return (GSTR9) may be used for filing this Table. 15 Reasons for non-reconciliation between ITC availed on the various expenses declared in Table 14R and ITC declared in Table 14S shall be specified here. 16 Any a

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n ……… (b) the *profit and loss account/income and expenditure account for the period beginning from ………….…..… to ending on ……., and (c) the cash flow statement for the period beginning from ……..…to ending on ………, -attached herewith, of M/s …………… (Name), …………………….………… (Address), ..…………………(GSTIN). 2. Based on our audit I/we report that the said registered person- *has maintained the books of accounts, records and documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder *has not maintained the following accounts/records/documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3. 3. (a)

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e cash flow Statement are *in agreement/not in agreement with the books of account maintained at the Principal place of business at ……………………and ** ……………………additional place of business within the State. 4. The documents required to be furnished under section 35 (5) of the CGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act is annexed herewith in Form No. GSTR-9C. 5. In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the particulars given in the said Form No.GSTR-9C are true and correct subject to following observations/qualifications, if any: (a) ……………………………………………………………………………&he

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………………………………… Name of the signatory ……………………………….…… Membership No…………………………………..………… Date: ……………………….… Full address ………………………………………………………………………………………………………………..…… II. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by a person other than the person who had conducted the audit of the accounts: *I/we report that the audit of the books of accounts and the financial statements of M/s…………………. ………………..………………………………. (Name and address of the assessee with GSTIN) was conducted by M/s. ………………&he

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expenditure account and balance sheet. 2. I/we report that the said registered person- *has maintained the books of accounts, records and documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder *has not maintained the following accounts/records/documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3. 3. The documents required to be furnished under section 35 (5) of the CGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act is annexed herewith in Form No. GSTR-9C. 4. In *my/our opinion and to the best of *my/our information and according to examination of books of account including other relevant documents and explanations given to *me/us, the particulars given in the said Form No.9C are true and correct subject to the following observations/qualifications, if any: (a) …………&hellip

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2018 (12) TMI 866 – CESTAT CHENNAI – TMI – Transfer of intellectual property right service – transfer of Goodwill – scope of definition under section 65(55b) of Finance Act,1994 – Held that:- The Tribunal in the case of Alstom T&D [2018 (2) TMI 148 – CESTAT CHENNAI] had occasion to analyze a similar issue wherein a trademark which was registered / recognized outside India was subject to levy of service tax under IPR service. The Tribunal relied upon various decisions and held that the transfer of such trademark which has not been recognized or registered within India will not fall within the ambit of Intellectual Property Right Service.
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The transfer of goodwill will not fall within the definition of IPR service as stated in Section 65(55b) of Finance Act, 1994.
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Valuation and quantification of demand – The demand raised is based on the Transfer of Business Agreement (425.25 crores) from which the value for transfer of goodwill is derived by the department on the basis of t

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ion to manufacture of spare parts, this division used to procure parts from vendors also. The items manufactured and procured were sold by the spare parts division to their dealers. The appellants sold the spare parts business division to Mobis India Ltd. under a Business Transfer Agreement dated 26.4.2007 as a going concern with effect from 1.5.2007. The consideration for the said transfer was agreed at ₹ 425.25 crores. A separate Trade Mark Licensing Agreement was executed on 30.4.2007 as per which Mobis India Ltd. would pay 8.5% of their annual domestic sales to the appellant as fee for trademark license granted to them for a period of 10 years commencing from 1.5.2007 till 30.4.2007. During audit of Mobis India Ltd. conducted by the internal audit wing of LTU, Chennai, it was noticed that in their auditor s report for 2007 – 08, fixed assets, current assets and current liabilities had been mentioned as acquired at book values and that the company had also paid consideration t

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dia Ltd. in their balance sheet, the notional value of goodwill was fixed at 8.5% of the total sale consideration (Rs.425 crores) on the basis of the agreement dated 30.4.2007 and this worked out to be ₹ 33.31 crores. Thus, according to department, out of ₹ 425 cores paid as consideration for sale of ongoing business to Mobis India Ltd., ₹ 33.31 crores appears to be value of goodwill transferred to Mobis India Ltd. Show cause notice was issued proposing to demand service tax on the value of ₹ 33.31 crores to the tune of ₹ 3,66,47,575/- along with interest and also for imposing penalties. After due process of law, the adjudicating authority confirmed the demand, along with interest and also imposed penalties. Hence this appeal. 2. The ld. counsel Shri S. Muthuvenkataraman assisted by Ms. Cynduja Crishnan and Shri S. Ramamurthy appeared and argued the matter. He submitted that the demand has been raised alleging ₹ 33.31 crores is the value of goodwill

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rved by the Hon ble Supreme Court that the term goodwill signifies the value of the business in the hands of a successor, so far as increased by the continuity of the undertaking being preserved in the shape of the right to use the old name and otherwise. It is something more than a mere chance or probability of old customers maintaining their connection, though this is a material part of the practical fruits . Thus, goodwill is a whole advantage belonging to the firm, its reputation and connected materials thereof. There exist no law in India which either recognizes or protects goodwill as an intellectual property right in India. The department has extended the meaning of any other similar intangible property in section 65(55b) of Finance Act, 1994 to include goodwill also by erroneous interpretation. On application of the principle of ejusdem generis , the only interpretation that can be arrived from the words any other similar intangible property is that other intangible properties

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ts of the present case. He relied upon the case of Commissioner of Income Tax Vs. Associated Electronics and Electrical Industries (Bangalore) Pvt. Ltd. – [2016] 6 ITR-OL 471 (Kar.) to argue that in the said case the Hon ble High Court of Karnataka was dealing with an issue of capital gains on transfer of trademark wherein the High Court has observed that trademark and goodwill are two distinct separate concepts. It was stated therein that goodwill has no existence except in connection with the continuing business. Goodwill not being an intellectual property right the demand raised cannot sustain. 2.1 The department has relied upon the Circular dated 17.9.2004 wherein it is clarified by the Board that goodwill also would be in the nature of intellectual property right. However, the Courts and Tribunals in various cases have analyzed the said circular and held that only when the intellectual property right is recognized under the Indian law would the same be subject to levy of service t

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license. The dispute in the present case is not with regard to the amount received by the appellant as per this agreement dated 30.4.2007. The department alleges that as per the agreement dated 26.4.2007 which is a Business Transfer Agreement, the appellant having received ₹ 425 crores in total such amount would also include the value of goodwill. Though nothing specifically has been stated in the Business Transfer Agreement with regard to transfer of goodwill, Mobis India Ltd. had reflected in their balance sheet an amount of ₹ 80.29 crores being the value of goodwill. Based upon this accounting pattern adopted by Mobis India Ltd., the demand has been raised upon the appellant alleging that there is transfer of goodwill which is transfer of intellectual property right under Section 65(55b). But however, the value of goodwill has been arrived by the department not on the basis of the value reflected in the accounts of Mobis India Ltd. but basing the same on the trademark li

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odwill was not shown separately in the Business Transfer Agreement. However, Mobis India Ltd. reflected the value of the goodwill received by them to be ₹ 80.29 crores in their balance sheet. This clearly indicates that there has been transfer of goodwill by the appellant. In the case of Hindustan Coca Cola Beverages Pvt. Ltd. (supra), the Hon ble Delhi High Court had considered the issue with respect to whether goodwill is an intangible property or not and held that it is similar to technical know-how, patents, copyright, trademark etc. The adjudicating authority has relied upon the Board s circular dated 17.9.2004 which has clarified that intellectual property emerges from an application of intellect, which may be in the form of an invention, design, product, process, technology, book, goodwill etc. That therefore the demand raised for the transfer of goodwill is legal and proper. The appellants have not reflected the value of the goodwill in the Business Transfer Agreement. Th

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ude copyright . 5.1 From the definition of intellectual property right laid in Section 65(55a), it is clear only IPR which comes under any law in force would come within the ambit of the definition. Though goodwill may be in the nature of intangible right, there is no law which recognizes it as an intellectual property right. In fact, goodwill is attached to an ongoing business whereas IPR is not always so. The right over IPR may be obtained by an individual also. Goodwill of a company may include the value of IPR held by him but not the vice versa. According to the department, the words any other similar intangible property would include goodwill also. We fail to agree with this argument. The main decision relied by the ld. AR to support the findings in the impugned order is the decision in the case of Hindustan Coca Cola Beverages Pvt. Ltd. (supra). On perusal of the said judgment, we find that the issue under consideration before the Hon ble High Court was with regard to the depreci

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recognized outside India was subject to levy of service tax under IPR service. The Tribunal relied upon various decisions and held that the transfer of such trademark which has not been recognized or registered within India will not fall within the ambit of Intellectual Property Right Service. From the above discussion, we are of the considered opinion that transfer of goodwill will not fall within the definition of IPR service as stated in Section 65(55b) of Finance Act, 1994. 5.3 Coming to the valuation and quantification of demand, the ld. counsel has pointed out that department has based upon the separate agreement for trademark license entered by them with Mobis India Ltd. dated 30.4.2007, to arrive at the value of the goodwill that has been alleged to be transferred. The department does not have a case that appellant has not paid service tax on the amount received by this separate agreement for transfer of trademark dated 30.4.2007. The demand raised is based on the Transfer of B

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2018 (9) TMI 1778 – CESTAT, Delhi – TMI – CENVAT Credit – stock lying in their factory – Bills of Entries which are more than six months old – Held that:- An identical issue was dealt by the Tribunal in the case of M/s Sanwariya Tiles Pvt. Ltd. & others Vs. CEC & CGST, Jodhpur [2018 (6) TMI 783 – CESTAT NEW DELHI], where it was held that By adopting the principles of harmonious construction and interpretation of rule, the appellant right to avail the credit at the time of coming out of the exemption scheme cannot be curtailed down by adopting Rule 4(1) of the Cenvat Credit Rules – credit allowed – appeal allowed – decided in favor of appellant. – Appeal No. E/52061/2018-SM (Arising out of Order-in-Appeal No. 101(AG)/CE/JDR/2018 dated 24.2.

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venue by entertaining a view that they cannot avail the Cenvat credit on the basis of the Bills of Entries which are more than six months old, initiatied proceedings against them resulting in passing of the present impugned orders. 3. I find that an identical issue was dealt by the Tribunal in the case of M/s Sanwariya Tiles Pvt. Ltd. & others Vs. CEC & CGST, Jodhpur vide Final Order No. 52101-52102/2018 dated 1.6.2018, the Tribunal observed as under: 5. After hearing both the sides, I find that there is no dispute about the appellant s entitlement to avail the credit of the inputs lying in stock as on the date of their crossing the exemption limit, in terms of Rule 3(2) of the Cenvat Credit Rules, 2004. There is also no dispute abo

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ication. Their right to avail the credit would arise only on crossing the exemption limit. Such right specifically stands extended to them by the provisions of Rule 3(2) of the Cenvat Credit Rules and cannot be extinguished by making reference to Rule 4(1). Rule 4(1) which provide for availment of credit within a period of six months from the relevant document applies whether an assessee is already working under the cenvat credit scheme and is availing the cenvat on regular basis. A harmonious interpretation of both the rules leads to the above conclusion. By referring to one provision of law, the other provision cannot be made otiose, as per the settled principle of interpretation. It is not the appellant s fault that they crossed the exem

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2018 (12) TMI 1405 – MADRAS HIGH COURT – 2018 (19) G. ST. L. 408 (Mad.) – Refund of integrated tax paid – opportunity of personal hearing not provided – principles of natural justice – Held that:- It is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated July 13, 2018, filed in response to the deficiency memo dated July 4, 2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated July 13, 2018.
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The respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation given by the petitioner, as to how such deficiencies pointed out by the respondent are either improper or not warranted. Therefore, this court is of the view

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petitioner through their reply dated July 13, 2018 informed the respondent that the application filed already is in order and thus, requested the respondent to consider their refund application. In the said communication, the petitioner also specifically requested to afford a personal hearing in case, the respondent is not inclined to accept their submissions. However, without referring to the said reply dated July 13, 2018 received by the respondent on July 17, 2018 and also without providing an opportunity of personal hearing to the petitioner, the present impugned order was passed reiterating the very same reason stated in the said deficiency memo. 3. Mr. P. Rajkumar, learned counsel for the petitioner submitted that when the petitioner has explained in detail as to how the deficiencies pointed out in the memo dated July 4, 2018 are not factually correct, the respondent is not justified in reiterating the very same reasons in the impugned order, without looking into the contentions

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age, is not expressing any view on the merits of the refund claim, as it is for the respondent to consider and decide. Upon considering the facts and circumstances of the present case and submissions made by the learned counsels appearing on either side, it is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated July 13, 2018, filed in response to the deficiency memo dated July 4, 2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated July 13, 2018. 7. Perusal of the impugned order would show that the respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation given by the petitioner, as to how such deficiencies poin

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2019 (1) TMI 610 – MADRAS HIGH COURT – 2018 (19) G. S. T. L. 408 (Mad.) – Refund of integrated tax (IGST) – opportunity of personal hearing – principles of natural justice – Held that:- It is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated 13.07.2018, filed in response to the deficiency memo dated 04.07.2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated 13.07.2018.
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Perusal of the impugned order would show that the respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation given by the petitioner, as to how such deficiencies pointed out by the respondent are either improper or not warranted – this Cou

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plication after rectification of the deficiencies pointed out in the said memo. The petitioner through their reply dated 13.07.2018 informed the respondent that the application filed already is in order and thus, requested the respondent to consider their refund application. In the said communication, the petitioner also specifically requested to afford a personal hearing, in case, the respondent is not inclined to accept their submissions. However, without referring to the said reply dated 13.07.2018 received by the respondent on 17.07.2018 and also without providing an opportunity of personal hearing to the petitioner, the present impugned order was passed reiterating the very same reason stated in the said deficiency memo. 3.Mr.P.Rajkumar, learned counsel for the petitioner submitted that when the petitioner has explained in detail as to how the deficiencies pointed out in the Memo dated 04.07.2018 are not factually correct, the respondent is not justified in reiterating the very sa

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set out in their application for refund. This Court, at this stage, is not expressing any view on the merits of the refund claim, as it is for the respondent to consider and decide. Upon considering the facts and circumstances of the present case and submissions made by the learned counsels appearing on either side, it is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated 13.07.2018, filed in response to the deficiency memo dated 04.07.2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated 13.07.2018. 7. Perusal of the impugned order would show that the respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation g

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2019 (1) TMI 1021 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI – Classification of goods – rate of tax – Tile Adhesive – Tile Grout – Whether the two categories of products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017,-Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017- Central Taxes (Rate) liable to CGST at 9%?
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Held that:- The applicant in their submissions have mentioned that the concerned products are non-refractory chemical-based preparation. Now it is seen that non-refractory preparations are covered under Chapter 3214 – resort shall be made the Explanatory Notes of Harmonized System of Nomenclature published by the World Customs Organization, Brussels (HSN Explanatory Notes) to interpret the above relevant Sub-headings.
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The group of Non refractory surfacing preparations which fall under Chapter 32.14 includes “preparations in powder form based on quartz and cement wi

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E, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Asian Paints Ltd., the applicant, seeking an advance ruling in respect of the following ISSUE. Whether following two categories of products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017,-Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017- Central Taxes (Rate) liable to CGST at 9%? 1. Tile Adhesive i Tile Adhesive for Normal Application ii. Glass Tile Adhesive iii. Tile-on-Tile Application iv. Tile Adhesive for Stone Heavy Tile Application 2. Tile Grout i. Cement based Tile Grout ii. Epoxy based Tile Grout At the outse

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IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 and paying CGST thereon. The description of the products is explained below and the invoices for the products is annexed herewith in Table – 1 Table – 1 Sr. No. Product Description Classification adopted by NM Invoice dated Annexure Tile Adhesive i. Tile Adhesive for Normal Application ii. Glass Tile Adhesive iii. Tile – on – Tile Application v. Tile Adhesive for Stone & Heavy Tile Application Entry 24 of Schedule IV 3 Tile Grout i. Cement based Tile Grout ii. Expoxy based Tile Grout Entry 24 of Schedule IV 1.4. The brief description of each of the above two categories of product is given below for ready reference: 1.5. Tile Adhesive: Tile adhesive is compound which converted into slurry by adding water to apply on wall/ stones/tiles to fix the tiles on the surface. The compound consists of Cement, Sand and Polymer. Sub category of tile adhesive products are explained as below: 1.5.1. Tile Adhesive for normal app

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ce. 1.5.3. Tile-on-Tile application: The product Tile-on-Tile Adhesive is single component Grey cement based polymer modified adhesives for fixing tiles over tiles on floors and walls in interiors as well as exteriors. The product contains special adhesives that provide excellent bonding & grabbing properties. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed using trowel. The said surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc. where the tiles are applied. It is used an adhesive for bonding of tiles. 1.5.4 Tile Adhesive for Stone & Heavy Tile application: The product Tile Adhesive for Stone & Heavy Tile Application is single component Grey cement based polymer modified tile adhesive specially designed for heavy stone tile applications

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n for ceramic tiles, vitrified tiles and stone joint where hygienic and sterile condition is expected. The compound consists Of Epoxy resin, Hardener & Colorant 1.7. The Applicant states that the above products are not manufactured by the applicant. The applicant buys the product from separate vendors and sells it under its brand name. 1.8. The Applicant states that under the erstwhile regime, the manufacturers of the Applicant were classifying the above products under Chapter Heading 3214. At this point it is relevant to note that the rate of excise duty for the Chapter Heading 3214 and the 3824 were same. Further, since the Applicant was merely a trader, the classification issue did not arise at the hands of the Applicant under the erstwhile Excise regime. 1.9. The Applicant submits that the aforesaid products have also been imported in the past under both the competing entries. Since the rate of the tax under both the entries was same, the applicant did not face the issue of cor

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of above two categories of products. 2.3. Entry 97 of Schedule III to Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference: Schedule III 9% S.No. Chapter [Heading/Sub-heading/Tariff item Description of Goods 1 2 3 97 3824 Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included 2.4. The other competing entry is Entry 24 of the Schedule IV to Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017. The same is extracted below for ready reference: Schedule IV 14% S.No. Chap/Hdg/Sub-hdg Tariff item Description of Goods 1 2 3 24. 3214 Glaziers putty, grafting putty, resin cements, caulking compounds and other mastics; painters fillings; non- refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like 2.5. The Applicant submits that on a plain readin

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The Applicant submits that in case of any ambiguity in classification of goods under the Notification No. 1/2017, resort shall be made to the General Explanatory Notes to the Customs Tariff Act and the HSN Explanatory Notes. 3.2. The Explanation to the above Rate Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference: Explanation.- For the purposes of this Schedule, (i) The phrase unit container means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre- determined quantity or number, which is indicated on such package. (ii) The phrase registered brand name means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified

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dy reference: (A): Relevant Extract of Chapter Heading 32 14: Tariff Item Description of goods Unit Rate of duty Standard Preferential areas 3214 GLAZIERS PUTTY, GRAFTING PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS FILLINGS; NON-REFRACTORY SURFACING PREPARTIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE 32141000 – Glaziers putty, grafting putty, resin cements, caulking compounds and other mastics; painters fillings kg. 10% 321490 – Other : 32149010 Non-refractory surfacing preparations kg. 10% 32149020 Resin cement kg. 10% 32149090 Other kg. 10% (B): Relevant Extract from Chapter Heading 3824 Tariff Item Description of goods Unit Rate of duty Standard Preferential areas 1 2 3 4 5 3824 PREPARED BINDERS FOR FOUNDRY MOULDS OR CORES; CHEMICAL PRODUCTS AND PREPARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED 3824 50 – Non-refractory mortars and concretes: 3

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ing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: (1) Powdered preparations consisting of equal parts of plaster and sand with plasticisers. (2) Preparations in powder form based on quartz and cement with small quantities of added plasticisers, used for instance, after adding water, for setting wall or floor tiles. (3) Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), with added pigments and, where appropriate, water or solvent. (4) Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint. 3.7. The Applicant subm

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Vs. Commissioner of Central Excise, Jaipur – 2018-TIOL-243 CESTAT-DEL = 2017 (12) TMI 892 – CESTAT NEW DELHI wherein while deciding the classification of finished products such as cement grout, repair mortar, repair concrete, tile adhesives, waterproofing compounding sealants for tiles, walls etc. Hon ble CESTAT held that the above products are not of a type used for surfacing preparations for walls, ceilings etc. It is held that the said products cannot be classified under Chapter Heading 3214. 3.10. Thus, the Applicant submits that, the above two categories of products will not fall under Non-Refractory Surfacing Preparations contained in Chapter Heading 3214. 3.11. The Applicant submits that the above two categories of products will fall under Chapter Heading 3824 under the Sub Heading 3824 50 relating to Non refractory mortars and concretes. 3.12. The Applicant submits that the Chapter Notes and HSN Explanatory Notes does not provide any specific note to interpret the said Sub-Head

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. Vs. Assistant Sales Tax Officer, Akola – (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 – SUPREME COURT OF INDIA held that if a word is used in a taxing statute, it has to be understood as in common parlance. 3.15. Further, Hon ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh – (1967) 19 STC 469 (SC) while considering the question of Whether the word coal covers Charcoal, held that the meaning of the word coal in the statute as understood in its commercial or popular sense would include charcoal . The Apex Court upheld the decision of High Court Wherein the High Court had observed that while construing entries in a statute like the Sales Tax Acts, the Court should prefer the Popular meaning of the terms used in such entries and not their dictionary meanings and that so construed charcoal would be included in the word coal . 3.16. The Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. Connaught Plaza Restaurant (P

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wall. 3.18. The Applicant submits that in the absence of definition of the term mortar under the Act, resort can also be made to the dictionary meaning of the term mortar. As held by the Supreme Court in Ponds India Ltd vs. Commissioner of Trade Tax, Lucknow – (2008) 15 VST 256 (SC) = 2008 (5) TMI 46 – SUPREME COURT the dictionary meaning is one of the valuable aid for legal interpretation. 3.19. Thus, the term mortar defined in various dictionaries is extracted below for ready reference: Oxford Dictionary: A mixture of lime with cement, sand and water, used in building to bond bricks or Stones. Hawley s Condensed Chemical Dictionary at Pg 863: A type of adhesive or bonding agent that may be either inorganic or organic, soft and workable when fresh but sets to a hard, infusible solid on standing, either by hydraulic action or by chemical cross-linking. The chief ingredients of inorganic mortars are cement, lime, silica, sulfur and sodium or potassium silicate. Organic mortars are based

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products under 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 and paying CGST thereon. The description of the products is explained below and the invoices for the products are annexed along with the application. Table – 1 Sr. No. Product Description Classification adopted by NM 1. Tile Adhesive for Normal Application Entry 24 of Schedule IV 2. Glass Tile Adhesive Entry 24 of Schedule IV 3. Tile – on – Tile Application Entry 24 of Schedule IV 4. Tile Adhesive for Stone & Heavy Tile Application Entry 24 of Schedule IV 5. Cement based Tile Grout Entry 24 of Schedule IV 6. Epoxy based Tile Grout Entry 24 of Schedule IV 1.3. The Applicant submits that, in the present Advance Ruling Application the Applicant has raised the question for classification of 6 products which can be broadly classified in two categories; 1) Tile Adhesives and 2) Tile Grouting Material. 1.4. Before. going to the description of each of the products, below is the composition of

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e tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fixed. This products is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc., where the tiles are applied. It is used an adhesive for bonding of tiles. 1.8. Glass Tile Adhesive: 1.8.1. The Product Glass Tile Adhesive is single component white cement based polymer modified fiber reinforced adhesives for fixing glass mosaic tiles in interiors as well as exteriors. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fixed. This products is used under the tiles to join the tiles together in Order to provide strength to the walls, floors, etc. where the tiles are applied. It is used an adhesive for bonding of tiles. 1.9. Tile – on – Tile Application: 1.9.1

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internal as well as external vertical surfaces. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc. where the tiles are applied It is used an adhesive for bonding of tiles. 1.11 Cement based Tile Grout: 1.11.1. This product is a single component polymer modified tile grout for filling tile joints upto 5mm width. It is a specially formulated premium, fast selling, low shrinkage grout that prevents ingress of water through the joint. 1.12. Epoxy based Tile Grout: 1.12.1. This product is a two-component epoxy resin based tintable grout specifically designed for use in application for ceramic tiles, vitrified tiles and stone joint where hygienic and sterile condition is expected. 1

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ntries was same under the Central Excise Tariff Act, 1985, the applicant did not face the issue of correct classification. 1.17. The Applicant states that as far as classification under GST is concerned, if the products are classifiable under Chapter Heading 3214, then the said products will be liable to GST at 28% under Entry 24 of Schedule IV of the Notification No. 1/2017 – Central Tax (Rate) dated 2806.2017. In case, it is held that above products are classifiable under Chapter Heading 3824 then the rate Of GST applicable will be 18% under Entry 97 of Schedule III of the said Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017. 1) In view of the above facts, the applicant has raised the question as to whether the six products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017 – Central Taxes (Rate) liable to CGST at 9%? Submissio

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or cores, chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included 2.5. The Other competing entry is Entry 24 of the Schedule IV to Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017. The same is extracted below for ready reference: Schedule IV 14% S. No. Chapter/Heading/Sub-heading/ Tariff item Description of Goods 1 2 3 24. 3214 Glaziers putty, grafting putty, resin cements, caulking compounds and other mastics: painters fillings; non- refractory Surfacing preparations for facades, indoor walls, floors, ceilings or the like. 2.6. The Applicant submits that on a plain reading of the description in the above two competing entries, it is clear that the aforesaid six products of the applicant will fall under Entry 97 of Schedule III being chemical products and preparations of the chemical or allied industries. 2.7. The applicant submits that, the aforesaid six pro

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as the last finishing material. The said preparations are used to give the finishing touches on the surface. Therefore, the entry refers to surfacing preparations for facades, indoor walls, floors, ceilings where final smooth finishing is required. 2.10. The Applicant submits that product of the Applicant is not used as surface preparation neither it is meant to be used as a surface preparation. 2.11. The products of the applicant such as Tile Adhesives is nothing but a mortar used for fixing the tiles for any kind of flooring or walls. The difference between the normal mortar and the tile adhesives is the negligent percentage of additive which delays the process of drying the mortar. If a mason binds the tiles with a normal mortar, then depending upon the environmental conditions, the mortar will dry up quickly. Once the mortar has dried, the mason cannot then set the tiles or remove it without damaging the tile. On the Other hand, if the mason uses the tile adhesive, the mason, the

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sting of mixtures of natural products. 2.15. In the present case, the tile adhesives and the tile grout are prepared binders and chemical preparations consisting of natural products such as cement and grit. Further, the said products do not fall under any other Chapter Heading as explained above. Thus, the said products will be classifiable under Entry 97 of Schedule III consisting of goods of Chapter Heading 3824. 3. The Applicant submits that even by the Chapter Notes to Customs Tariff Act and the HSN Explanatory Notes, the above six products are classifiable under Chapter Heading 3824: 3.1. The Applicant submits that in case of any ambiguity in classification of goods under the Notification No. 1/2017, resort shall be made to the General Explanatory Notes to the Customs Tariff Act and the HSN Explanatory Notes. 3.2. The Explanation to the above Rate Notification No. 1/2017 – Central Taxes (Rate) dated is extracted below for ready reference: Explanation.- For the purposes of this Sch

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the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 3.3. In view of the Explanation (iv), the Chapter Heading under consideration shall I con be interpreted on the basis of rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. Before resorting to the Chapter Notes and Sub Heading Notes of the Customs Tariff Act, the relevant Tariff Items of the Customs Tariff Act are extracted below for ready reference: (A): Relevant Extract of Chapter Heading 3214: Tariff Item Description of goods Unit Rate of duty Standard Preferential areas 3214 GLAZIERS PUTTY, GRAFTING PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS FILLINGS; NON-REFRACTORY SURFACING PREPARTIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE 32141000 – Glaziers putty, grafting putty, resin cements, caulk

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(HSN Explanatory Notes) to interpret the above relevant Sub-headings. 3.6. As per the plain reading of the HSN Explanatory Note on Chapter Heading 3214, the aforesaid six products does not fall under the Chapter Heading 3214. The relevant portion Of the HSN Explanatory Notes is extracted below for ready reference: 32.14 – GLAZIERS PUTTY, GRAFHNG PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS: PAINTERS FILLINGS; NON-REFRACTORY SURFACING PREPARATIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE. (B) NON-REFRACTORY SURFACING PREPARATIONS. Non-refractory surfacing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: 1. Powdered preparations consisting of equal parts of plaster and sand with plasticisers. 2. Preparations in powder form based on quartz and Cement with small, quantities of

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ng, 4.2. In the present case, all the above six products are non-refractory preparations. However, they are not used for water-proofing or improving the appearance of the wall of tiles. The said six products are used for bonding of the tiles either horizontally or vertically. Further in no case, the above six products emerge as final visible surface. In fact, the Tile Adhesives are never used on the surface. 4.3. The Applicant relies on the decision of Hon ble CESTAT in the case of Sika India Pvt. Ltd. Vs. Commissioner of Central Excise, Jaipur – 2018-TIOL-243 CESTAT-DEL = 2017 (12) TMI 892 – CESTAT NEW DELHI wherein while deciding the classification of finished products such as cement grout, repair mortar, repair concrete, tile adhesives, waterproofing compounding sealants for tiles, walls etc. Hon ble CESTAT held that the above products are not of a type used for Surfacing preparations for walls, ceilings etc. It is held that the said products cannot be classified under Chapter Headi

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IA held that in interpreting items in statutes like the Excise Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expression used but to their popular meaning that is to say, the meaning attached to them by those dealing in them. Further, Hon ble Supreme Court in the case of Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola – (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 – SUPREME COURT OF INDIA held that if a word is used in a taxing statute, it has to be understood as in common parlance. 4.9. Further, Hon ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh – (1967) 19 STC 469 (SC) = 1967 (2) TMI 65 – SUPREME COURT OF INDIA while considering the question of whether the word coal covers charcoal, held that the meaning of the word coal in the statute

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r commercial or trade understanding, or according to their popular meaning. In other words, they must be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it. 4.11 The Applicant submits in the present case, the product is mainly used by the civil contractors and plumbers who use the above products of the Applicant company for fixing the tiles. The said contractors and plumbers use the tile adhesives as mortars for bonding the tiles with floor or the wall. 4.12. The Applicant submits that in the absence of definition of the term mortar under the Act, resort can also be made to the dictionary meaning of the term mortar. As held by the Supreme Court in Ponds India Ltd Vs. Commissioner of Trade Tax, Lucknow – (2008) 15 VST 256 (SC) = 2008 (5) TMI 46 – SUPREME COURT the dictionary meaning is one of the valuable aid for legal interpretation. 4.13. Thus, the term mortar defined in various dictionaries is extracted below for ready re

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fixing and bonding the tiles on the walls and floorings. It is not used as a surface finishing material. Hence, the said products will be covered under the above Chapter Heading 3824 only. 5. The Applicant submits that above six products will be classifiable under Chapter Heading 3824 as per Rule 3 of the General Rules for the Interpretation of First Schedule to the Customs Tariff Act. 1975. 5.1. The Applicant further submits that even as per the General Interpretation Rules applicable to First Schedule to the Customs Tariff Act, 1975, the aforesaid six products will be classifiable under Chapter Heading 3824. 5.2. The Applicant submits that the products sold by the Applicant is mixture consisting of different goods such as cement, sand and additives. 5.3. Thus, the said products will be classifiable as per Rule 3 read with Rule 2(b) of the General Interpretation Rules to First Schedule. Rule 3 of the said Rules is extracted below for ready reference: 3. When by application of rule 2(b

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by reference 10 (a) or (b), they shall be classified under the heading which occur s last in numerical order among those which equally merit consideration, 5.4. As per Rule 3(b) the mixtures of different materials shall be classifiable as per the material which gives them the essential character. In the present case, no doubt it is the cement which gives them the essential character. It is the cement which is used as the main binder. Thus, the said product is classifiable as a prepared binder of cement. 5.5. In any case, even if the above products cannot be classified under Rule 3(b), the said products will be classifiable under Chapter Heading 3824 being the last heading occurring in numerical order among those which merits equal consideration. 6. In view of the above, it is respectfully prayed that the question raised in the present advance ruling application be answered in favour of the Applicant holding that the above six products are classifiable under Entry 97 of Schedule III li

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larification regarding classification of goods as per HSN Code of Central Excise Tariff Act and rate of tax accordingly. Applicant has charged 28% on said product as per GST Act & as per HSN code 3214, but applicant has raised the issue that no such product has clearly mentioned in chapter heading of Central Excise Tariff Act and he urged that his product should fall in HSN Code 3824 instead of HSN Code 3214 and levy of ta be 18% instead of 28%. He has further stated that the product is a non-refractory mortars and concretes under sub heading 382450. He further stated that as per such heading 38245010 description is concretes ready to use known as readymix concrete (RMC) . He stated that the goods manufactured by applicant is nothing but mortars as per tariff heading 382450 & product should fall 38245090 whose description is other for proving the claim Of the dealer he has given documents such as invoices, and application. After scrutiny of documents submitted along with applic

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ALLS, FLOORS, CEILINGS OR THE LIKE 32141000 – Glaziers putty, grafting putty, resin cements, caulking compounds and other mastics; painters fillings kg. 10% 321490 – Other : 32149010 Non-refractory surfacing preparations kg. 10% 32149020 Resin cement kg. 10% 32149090 Other kg. 10% As per the applicant request said product should be fall in HSN Code 3824 and subheading 38245090 which is as under: 38610000 Refectory cements, morters, concretes and similar compositions, other than products of heading 3801 Kg 10% 3824 PREPARED BINDERS FOR FOUNDRY MOULDS OR CORES; CHEMICAL PRODUCTS AND PREPARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED 38241000 – Prepared binders for foundry moulds or cores kg. 10% 38243000 – Non-agglomerated metal carbides mixed together or with metallic binders kg. 10% 382440 – Prepared additives for cements, mortars or concretes: 38244010 Damp proof or water proof compoun

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hesive, polymer reduces the water holding capacity of concrete and make it hard instantly. Polymer contained mixture also reduces compressive strength of the concrete, which is basic property of the cement / concrete mixture. Polymer i.e. methyl cellulose is act as plasticizer and in rightly fall in non-refractory surfacing preparation as per HSN Code 3214. The description of non-refractory surfacing preparation is as under: Non refractory surfacing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: 1) Powdered preparations consisting of equal parts of plaster and sand with plasticizers. 2) Preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles. 3) Pasty preparations made by coating mineral

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es, crushed stones, cement and water. Since it is made up of many materials, it is considered a composite material. The various aggregates such as gravel and stones are bound together by a mixture of cement and water that hardens over time and provide strength to the concrete. Various types of concrete are produced depending on its intended purpose, including: Portland cement concrete – This is the common concrete that is used as a building material for residential, industrial and commercial purposes. The cement used in this concrete is rich in alumina content (aluminous cement).This is a lime-based concrete. Asphalt concrete – this type is used primarily for road construction. The role of cement in this case is played by bitumen, which tightly holds and binds the concrete composites in the presence of coal tar at high temperatures. Polymer concrete – This type is used where the cementing material is a polymer. High temperature have the effect of weakening the bond and endangering the

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HPMC into the mortar, there will be a smaller decrease in the flexural strength of mortar but a larger decrease in the compressive strength. On the basis of structural engineering and common parlance test ready-mix concrete is rightly classified in description non refractory mortars and concretes under heading 3824 of central excise tariff act. Applicant has given number of citation of various courts on common parlance test, which are squarely applicable to the products covered by heading 3214 where in rate of tax is 28 In facts the decision given below cited by the applicant supports the view express by this office. 1) Indo International Industries Vs. Commissioner of Sales Tax, UP – (1981) 47 STC 359 (SC) = 1981 (3) TMI 77 – SUPREME COURT OF INDIA 2) Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola – (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 – SUPREME COURT OF INDIA 3) Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh – (1967) 19 STC 469 (SC)

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G The case was taken up for Preliminary hearing on dt. 18.07.2018 when Sh. Rahul Thakkar, Advocate along with Sh. Hiral Raja, G. M. Taxation & Sh. Niket Prasad Branch Manager and Sh. Ajay Patel, Sr. Manager Taxation appeared and contended for admission of application as per contentions in their ARA and oral & written submissions. Jurisdictional Officer, Sh. J. M. Raut, Dy. Commr. of Sales Tax (E-636), Large Tax Payer Unit-III, Mumbai appeared and made written submissions. The application was admitted and called for final hearing on 08.08.2018 when Sh. Rahul Thakkar, Advocate along with Sh. Hiral Raja, G. M. Taxation & Sh. Ajay Patel, Sr. Manager Taxation & Sh. Yogender Pandey appeared & made oral & written submissions. The Jurisdictional Officer was not present. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by both, the applicant and the department. The issue before us is a classification issue. The applica

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e products under Chapter Heading 3214 and they were merely traders, classification issue did not arise at their end. They have further submitted that the aforesaid products have also been imported in the past under both the competing entries, i.e. 3214 and 3824 and they did not have a classification issue because the rate of the tax under both the entries was same, Their contention is not correct. It is the duty of the manufacturer to arrive at a proper classification in respect of the goods manufactured. Just because multiple classifications attract the same rate of tax, it is not proper for a manufacturer to choose any classification that is deemed fit. The classification has to be based on the basis of a proper description of the goods. We find that the applicant in their submissions have mentioned that the concerned products are non-refractory chemical-based preparation. Now it is seen that non-refractory preparations are covered under Chapter 3214. The applicant has submitted that

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ractory surfacing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: (1) Powdered preparations consisting of equal parts of plaster and sand with plasticizers. (2) Preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles. (3) Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), With added pigments and, where appropriate, water or solvent. (4) Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint. It is see

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follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-44/2018-19/B-117 Mumbai, dt. 17/09/2018 Question :-1. Whether following two categories of products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017-Central Taxes (Rate) liable to CGST at 9%? 1. Tile Adhesive i. Tile Adhesive for Normal Application ii. Glass Tile Adhesive iii. Tile-on-Tile Application iv. Tile Adhesive for Stone Heavy Tile Application 2. Tile Grout i. Cement based Tile Grout ii. Epoxy based Tile Grout Answer :- In view of the discussions made above, the products in question will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 liable to GST @ 28% (14% each of CGST and SGST). – Case laws – Decisions – Judgements – Orders

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GST – Order No. 4/2018 – Dated:- 17-9-2018 – F. No. 349/58/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs *** New Delhi, the 17th September, 2018 Order No. 4/2018-GST Subject: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases

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Goods and Services Tax – Constitutional validity of restriction on migration of Cenvat Credit to GST – Transitional Credit – first stage dealers in excise Regime – prescribed documents (Invoices) olde

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Goods and Services Tax – Rate of tax – sub-contractor – even the sub-contractor providing services of composite supply of works Contract in respect of original works pertaining to railways would be co

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Goods and Services Tax – Started By: – Usha RaoJ – Dated:- 15-9-2018 Last Replied Date:- 27-10-2018 – We have received incentive on sales from our principles. Also, during final calculation, our principals debit from the sales achieved, the amount in proportion to the percentage of incentive received. ( Say, if 10 lakhs is the sales incentive ( over and above normal operating discounts), this amount will be reduced to the extent in the subsequent year. Our Auditors say that this payment credit received to our account is taxable under GST and we are liable to pay now. When we enquired with our principals, they said that, they have raised credit note and debit note for the same and GST not charged . But returns are filed by the principals un

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Goods and Services Tax – Started By: – Ramakrishnan Seshadri – Dated:- 15-9-2018 Last Replied Date:- 19-9-2018 – Dear Sir,We have done a service for repair work in India relating to a Foreign Customer . He will be paying the amount in Indian rupees and he wants to issue invoice in his name and foreign address. Now our question is whether gst is applicable for service made or what is the procedure to be followed. can be treated as export of service and invoice can be raised against lut or how to proceed.Experts please guideThanks & REgards,S.Ramakrishnan – Reply By KASTURI SETHI – The Reply = In my view it is not export of service. – Reply By Rajagopalan Ranganathan – The Reply = Sir, According to Section 2 (6) of IGST Act, 2017, export

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y of service by you will not qualify as export of service. – Reply By Yash Jain – The Reply = Dear Sir,In GST Place of Service Provisions, if the Supply for the Service is rendered in India, then irrespective of the Location of the Recipient, it will be always be a Service Rendered in India – Reason & Logic – GST Being a destination & Consumption based Tax.For Taxes : Yes GST Will be charged.For Invoices : Yes you can raise the Invoice in Name of the Foreign Customer (Amendment has been made on 29.08.2018) were in bill to and Ship to Provision is being made applicable to Invoice also.Regards, – Reply By Yash Jain – The Reply = Dear Sir,The Bill to and Ship to is made applicable to service also. Inadvertently I had mentioned the Word

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2018 (10) TMI 1046 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (18) G. S. T. L. 314 (A. A. R. – GST) – Classification of Supply – rate of tax – EPC contract for set up of solar power generating system – composite supply of solar power generating system – eligibility of solar modules to be classified as principal supply – Turnkey EPC Contract in which the Applicant is required to undertake all activities, civil or otherwise – Other EPC Contract in which the Applicant is required undertakes all activities of turnkey projects except civil work – Supply Contract – Balance of Plant Supply Contract.
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Whether EPC contract for set up of solar power generating system be considered as a composite supply with PV modules being the principal supply and be taxed at a rate of 5% (i.e. tax rate applicable on the P. V. modules)?
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Held that:- The Hon. Supreme Court in the case of TTG. INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, RAIPUR [2004 (5) TMI 77 – SUPREME COURT OF INDIA], w

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ered into on the premise that the plant would continue to be situated at the place of construction. Such plant would therefore have an inherent element of permanency.
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The output of the project i.e. Electricity, would be available to an identifiable segment of consumer. Thus this output supply would involve an element of permanency for which it would not be possible and prudent to shift base from time to time or locate the plant elsewhere at frequent intervals.
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The Solar Power Plant cannot be shifted to any other place without dismantling the same. Further it is a tailor made system as per technical specification which cannot be sold as it is to the other person.
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Solar Power Plant includes civil work such as development of site, structure foundation, building cable trenches, civil work relating to invertors and control buildings, store rooms, canopies and such other civil structure and related activities as set out in Scope of work and the Technical Specifications. Civ

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pal supply does not arise and so GST tax rate of Solar power Generating System under notification No 01/2017-CT (Rate) dated 28.06.2017, at S. No. 234, under HSN Classification 84, 85 and 94 is not applicable.
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Ruling:- The scope of work in respect of “Turnkey Composite EPC Contract” includes designing, planning civil works, procurement of good, erection, testing and commissioning. Accordingly, “Turnkey EPC Contract” is not covered under Entry 234 of Schedule I of the Notification no. 1/2017 – Integrated Tax (Rate), Entry 234 of Schedule I of the Notification no. 1/2017 – Central Tax (Rate) both dated 28 June, 2017 and Entry 234 of Schedule I of the Notification no 1/2017 – State Tax (Rate) dated 29 June, 2017.
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The contract for Erection, Procurement and Commissioning of Solar Power Plant falls under the ambit “Works Contract Services” (SAC 9954) of Notification no. 11/2017 Central Tax (Rate) dated 28 June, 2017 and attracts 18% rate of tax under IGST Act, or 9% each under th

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THE APPLICANT: 1.1 Solairedirect India LLP undertakes Engineering, Procurement and Construction ( EPC )activities for Group companies as well as third parties for setup of solar power generating system where contract for commissioning of solar power generating system involves simultaneous supply of goods and services. 1.2 The solar power generating system installed by the Applicant under the EPC contract consists of various components like solar photovoltaic panels, solar inverters, transformers, module mounting structure, cables, connectors and other accessories where solar panels which account for approximately 70% to 75% of the total cost. 1.3 In a typical contract, the customers of the applicant acquire the land for the set-up of the solar power generating system and access is granted to the Applicant for executing the project on turnkey basis. 1.4 The steps involved in execution of a contract by the Applicant are as below: 1.4.1 Planning for the project The Applicant submits the

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1.4.5 Project management services While executing a contract, the Applicant is also expected to undertake the Project Management services, which typically includes: Engineering services of layout and foundation Erection of the structure Installation services of all components Pre-commissioning Commissioning Performance tests Defect rectification 1.4.6 Generation of electricity and connection with the grid The last step in the contract execution is the commencement of production of electricity and successful connection of the power generating system with the grid for transfer of electricity. 1.5 The essence of the contracts is generation of electricity using solar power. The essential deliverable therefore, under the contracts in question is a working solar power generating system, duly connected with the grid for transmission of electricity and the electricity being generated seamlessly as per the technical specifications (like voltage, etc) of the Applicant s customer. 1.6 Applicant

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set up of solar power generating system be considered as a composite supply with PV modules being the principal supply and be taxed at a rate of 5% (i.e. tax rate applicable on the P. V. modules)? 3. APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE OUESTION RAISED 3.1 The Applicant has made a detailed submission to demonstrate eligibility of solar modules to be classified as principal supply in the composite supply of solar power generating system and requests a ruling to be pronounced. The applicant has stated that the EPC Contract for the supply of solar power generating system should be considered as composite supply with the principal supply being the solar panels and accordingly, the tax rate of solar panels (5% under the heading 8541) should be applicable on the entire contract value. According to him in the instant case, the individual components (like solar panels, inverters, cables, etc.) are not being sold individually. The intention of the parties is to enter into a contra

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upply is defined under Section 2 (90) of CGST Act as the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. In the instant case, the individual components (like solar panels, inverters, cables, etc.) are not being sold individually. The intention of the parties is to enter into a contract for set up of a power generating system and not for the purchase of the individual components as such. Also, the individual components would not be of use as such unless they are assembled at the site (which would involve element of service) to work as a unit resulting in set up of the power generating system. This implies that the individual components or the services are supplied in conjunction with each other as these are not being sold as such but as a complete unit. The Applicant submitted that the contract undertaken is for supply of goods to customer and setting up power generating system wherein the installation/ assembly

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ased devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Solar lantern/solar lamp (g) Ocean waves/tidal waves energy devices/plants (h) Photo voltaic cells, whether or not assembled in modules or made up into panels The Applicant stated that Entry 234 given above is applicable to solar power generation system which includes all the components of a solar power generation system i.e. solar panels/modules, solar inverter, transformer, module mounting structure and the cables, connectors and other accessories. Accordingly, it could be construed that all such components would fall within the purview of entry 234 and hence would be liable to 5% IGST. 3.3 The Applicant has further submitted that if the contract is not to be considered as composite supply, it should be considered as two separate supplies of goods and services with goods being taxed at the rate of 5% and services being taxed at the rate of

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anently fastened to anything attached to the earth. As per Section 3 of the Transfer of Property Act, 1882, the expression immovable property which means a) Rooted in the earth, as in the case of trees and shrubs; b) Embedded in the earth, as in the case of walls and buildings; c) Attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached. 3.5 For determination of whether solar generating system is movable or immovable property the Applicant has placed reliance on the following judicial precedents : Commissioner of Sale Tax Vs Bombay Sound Service (and others) = 1998 (9) TMI 636 – BOMBAY HIGH COURT. Sri Velayuthaswamy Spinning Mills (P) Ltd Vs The Inspector General of Registration =2013 (3) TMI 681 – MADRAS HIGH COURT. Commissioner of Central Excise, Ahmedabad Vs Solid & Correct Engineering Works =2010 (4) TMI 15 – SUPREME COURT. Selvel Advertising Private Limited Vs Commercial Tax Officer, Alipore Charge = 1992 (5) TMI 182 – WEST BENGAL

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damage to the equipment. Based upon the above analysis, the Applicant submits that the solar power generating system is not an immovable property. Therefore, the EPC contract under consideration cannot be said to be works contract as defined under the CGST Act since the same is not in relation to immovable property. 3. Personal Hearing (PH) 4.1 In the matter personal hearing was given to the applicant, Mr. Sumit Rathi (CFO) and Mr. Sagar Shah (GSTP) of applicant appeared for personal hearing on 15.09.2018. During the PH they submitted additional statement in connection with their Application. During hearing applicant put forth two more queries and sought clarification on them. He wanted to know that in case the above contract is not considered as composite supply, can it be split into two i.e. one of supply of goods and another of service and taxed accordingly. Secondly he wanted to know which goods would fall under entry no. 234 of the rate notification as solar generating system. Th

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rwise, designing, procurement and supply of all equipment/ components for the power plant their Assembly, erection, and commissioning and Operations and Maintenance of the plant . ii) Other EPC Contract in which the Applicant is required undertakes all activities of turnkey projects except civil work. iii) In Supply Contract, the Applicant is required to supply the power plant on complete knocked down condition in piecemeal at project site. Customer engages a third party contractor or the Applicant for assembly, erection, and commissioning of the plant under a separate contract. iv) In Balance of Plant Supply Contract, the Applicant is required to supply goods and services stated above, except solar panels. Solar panels procured by the customer are made available by the customer to the Applicant for assembly and erection. As per submissions made in Advance Ruling Application the applicant undertakes Engineering, Procurement and Construction ( EPC ) activities for Group companies as wel

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ponent needed for installation of the plant. iii. Under take Civil works at the site such as development of site, structure foundation, install structure for transmission, build cable trenches, complete civil work relating to invertors and control buildings, store rooms, canopies and such other civil structure and related activities as needed. iv. Erection, commissioning and installation of the solar panels as per technical specification. v. Project management services such as Engineering services of layout and foundation, Erection of the structure, Installation services of all components, Pre-commissioning, Commissioning, Performance tests, Defect rectification. vi. Generation of electricity and connection with the grid i.e. related interconnection facilities and other related infrastructure for evacuation of power (Evacuation Infrastructure). vii. Apart from installation the contractor has to successfully test run the plant over certain period of time to check and ensure the optimum

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t contractor has to undertake works of installation, testing and commissioning of Solar Power Plant as per specific demands of owner. So it is not something sold out of shelf. g) Under these kinds of contracts there is a single lump sum price for the entire contract. h) The applicant has laid claim under notification No 01/2017-CT (Rate) dated 28.06.2017, at S.NO. 234, under HSN Classification 84, 85 and 94 and has argued that under EPC contact he is supplying Solar Power Generating System which is the principal supply in the composite supply where installation services are supplied in conjunction. With the principal supply being the solar panels and accordingly, the tax rate of solar panels (5% under the heading 8541) should be applicable on the entire contract value. i) As can be seen, the above entry is under the notification describing the Tax rate on Goods . The entry reads as renewable energy devices & parts for their manufacture . If the transaction is only of supply of good

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GST, as per definition of works contract service if construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning is for immovable property only, then it will classify as works contract only. Hence it means that aforesaid activities if they are undertaken for a movable property then it will not be a works contract service. k) Relying on judgements and citations submitted in Advance Ruling Application the applicant contends that as the solar plant, once installed is capable of being removed and transferred from one place to another without substantial damage hence same should qualify as movable property. Hence in view of above precedence and facts of the case, the given supply should be treated as supply of Solar Power Plant Only. I) As per the terms and conditions usually laid in EPC Contract the contractor i.e. the applicant has to undertake activities from engineering, design, to pr

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s with bolts and nuts although easily removable are not movable property when they have been set up with definite object of running an oil mill and not with intention of being removed after a temporary use. 2. In decision of M/s. T.T.G. Industries Ltd., vs Collector of Central Excise, 2004 (167) ELT 501 (SC) on 7 May, 2004 = 2004 (5) TMI 77 – SUPREME COURT OF INDIA. The facts of the case are as follows: The facts of the case are not in dispute. The appellant-company pursuant to the acceptance of its tender, entered into an agreement with M/s. SAIL, Bhilai Steel Plant for design, supply, supervision of erection and commissioning of four sets of Hydraulic Mudguns and Tap Hole Drilling Machines required for blast furnace Nos. 4 and 6 of the Bhilai Steel Plant. For this purpose, it imported several components and also manufactured some of the components at their factory in Marai Malai Nagar, Chennai. These components were transported to the site at Bhilai where the manufacture and commissi

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ace. The blast furnace in which the inputs are loaded is a massive vessel of 1719 m cubic metre capacity and the size of its outer diameter is 10.6 metres, and the height 31.25 metres. Hot air at 1200 degrees centigrade is fed into the blast furnace at various levels to melt the raw materials. With a view to protect the shell against heat, the blast furnace is lined with refractory brick of one metre thickness. Thus, the drilling machine has to drill a hole through one metre thickness of the refractory brick lining. The drilling machine as well as the mudgun are erected on a concrete platform described as the cast house floor which is in the nature of a concrete platform around the furnace. The cast house floor is at a height of 25 feet above the ground level. On this platform concrete foundation intended for housing drilling machine and mudgun are erected. The concrete foundation itself is 5 feet high and it is grouted to earth by concrete foundation. The first step is to secure the b

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o be erected. The weight of the mudgun is approximately 19 tons and the weight of the drilling machine approximately 11 tons. The volume of the mudgun is 1.5 x 4.5 x 1 metre and that of the drilling machine 1 x 6.5 x 1 metre. Having regard to the volume and weight of these machines there is nothing like assembling them at ground level and then lifting them to a height of 25 feet for taking to the cast house floor and then to the platform over which it is mounted and erected. These machines cannot be lifted in an assembled condition. The judicial member noticing these facts observed that it is a physical and engineering impossibility to assemble mudguns or the drill tap hole machines elsewhere in a fully assembled condition and thereafter erect or install the same at a height of 25 feet on the cast floor of the blast furnace. She found that even the Adjudicating Authority conceded the fact that the equipments have to be assembled/erected on the base frame projection of the furnace. She

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88 (9) TMI 51 – SUPREME COURT OF INDIA. She found support for her conclusion in the decision of this Court in Municipal Corporation of Greater Bombay & Ors. v. The Indian Oil Corporation Ltd. (1991) Supp. (2) SCC 18 = 1990 (11) TMI 407 – SUPREME COURT; and held that the twin tests laid down by this Court to determine whether assembly/erection would result in immovable property or not were fully satisfied in the facts of this case. She concluded :- "The test laid down by the Supreme Court is that if the chattel is movable to another place as such for use, it is movable but if it has to be dismantled and reassembled or re-erected at another place for such use, such chattel would be immovable. In the present appeal, even according to the finding of the Collector, mudguns and drill tap hole machines have to be dismantled and disassembled from the cast floor before being erected or assembled elsewhere. We have also arrived at the same conclusion independently, in para 10 above. Acc

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e the facts were that the respondent had taken on lease land over which it had put up, apart from other structures and buildings, six oil tanks for storage of petrol and petroleum products. Each tank rested on a foundation of sand having a height of 2 feet 6 inches with four inches thick asphalt layers to retain the sand. The steel plates were spread on the asphalt layer and the tank was put on the steel plates which acted as bottom of the tanks which rested freely on the asphalt layer. There were no bolts and nuts for holding the tanks on to the foundation. The tanks remained in position by its own weight, each tank being about 30 feet in height 50 feet in diameter weighing about 40 tons. The tanks were connected with pump house with pipes for pumping petroleum products into the tank and sending them back to the pump house. The question arose in the context of ascertaining the rateable value of the structures under the Bombay Municipal Corporation Act. The High Court held that the tan

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vable property. It cannot be moved from the place where it is erected as it is, and if it becomes necessary to move it, it has first to be dismantled and then re-erected at another place. This factual position was also accepted by the Adjudicating Authority. The technical member, however, held that the aforesaid decision was of no help to the appellant inasmuch as a leading international manufacturing firm had offered such machines for export to different parts of the world. He further observed that though on account of their size and weight, it may be necessary to shift or transport them in parts for assembly and erection at the site in the steel plant, they must nevertheless be deemed as individual machines having specialized functions. We are not impressed by this reasoning, because it ignores the evidence brought on record as to the nature of processes employed in the erection of the machine, the manner in which it is installed and rendered functional, and other relevant facts whic

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he Court observed that the twin tests of exgibility of an article to duty under the Excise Act are that it must be a goods mentioned either in the Schedule or under Item 68 and must be marketable. The word "goods" applied to those which can be brought to market for being bought and sold and therefore, it implied that it applied to such goods as are movable. It noticed the decisions of this Court laying down the marketability tests. Thereafter this Court observed :- "The basic test therefore, of levying duty under the Act is two fold. One, that any article, must be a goods and second, that it should be marketable or capable of being brought to market. Goods which are attached to the earth and thus become immoveable do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought to the market for being bought and sold. Therefore, both the tests, as explained by this Court, were not satisfied in the case of appellant as

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e, rather like a tower with a platform at its summit. This Court noticed that marketability was a decisive test for dutiability. It meant that the goods were saleable or suitable for sale, that is to say, they should be capable of being sold to consumers in the market, as it is, without anything more. The Court then referred to the decision in Quality Steel Tubes (supra) and distinguished the judgment in Narne Tulaman (supra) holding that the contention that the weigh bridges were not goods within the meaning of the Act was neither raised nor decided in that case. After considering the material placed on the record it was held that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation at the site of the sugar factory. It is not capable of being sold as it is, without anything more. This Court, therefore, concluded that mono vertical crystallisers are not "goods" within the meaning of the Act and, therefore, not exigible to excis

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quot;There can be no doubt that if an article is an immovable property, it cannot be termed as "excisable goods" for purposes of the Act. From a combined reading of the definition of 'immovable property' in Section 3 of the Transfer of Property Act, Section 3(25) of the General Clauses Act, it is evident that in an immovable property there is neither mobility nor marketability as understood in the Excise Law. Whether an article is permanently fastened to anything attached to the earth require determination of both the intentions as well as the factum of fastening to anything attached to the earth. And this has to be ascertained from the facts and circumstances of each case." It was also held that the decision of this Court in Sirpur Paper Mills Ltd. v. Collector of Central Excise, Hyderabad – 1998 (97) E.L.T. 3 (S.C.) = 1997 (12) TMI 109 – SUPREME COURT OF INDIA. must be viewed in the light of the findings recorded by the CEGAT therein, that the whole purpose beh

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oticed the volume of the machines concerned and their weight. Taking all these facts into consideration and having regard to the nature of structure erected for basing these machines, we are satisfied that the judicial member of the CEGAT was right in reaching the conclusion that what ultimately emerged as a result of processes undertaken and erections done cannot be described as "goods" within the meaning of the Excise Act and exigible to excise duty. We find considerable similarity of facts of the case in hand and the facts in Mittal Engineering and Quality Steel Tubes (supra) and the principles underlying those decisions must apply to the facts of the case in hand. It cannot be disputed that such drilling machines and mudguns are not equipments which are usually shifted from one place to another, nor it is practicable to shift them frequently. Counsel for the appellant submitted before us that once they are erected and assembled they continue to operate from where they are

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property as something attached to the earth. m) Applicant has further submitted that if the contract is not to be considered as composite supply, it should be considered as two separate contracts of supplies of goods and services with goods being taxed at the rate of 5% and services being taxed at the rate of 18% i.e. division of contract in two, one for supply of material and other for designing, installation, commissioning and maintenance of plant. Based on submission made by applicants, instant case is a single composite turnkey EPC contract of design, engineer, procure, transport, deliver, develop, erect, install, test and commission of project, as there is a single lump sum price for the entire contract. Hence the said EPC contract cannot be split in two separate contracts one of supply of goods and another that of services and taxed accordingly. n) Explanations covered under point i) and m) of 5. Findings, Analysis and Conclusion satisfactorily addresses additional queries raise

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ant includes civil work such as development of site, structure foundation, building cable trenches, civil work relating to invertors and control buildings, store rooms, canopies and such other civil structure and related activities as set out in Scope of work and the Technical Specifications. Civil structure cannot be dismantled and moved. 5) Based on submission made by applicants, instant case is a single composite turnkey EPC contract of design, engineer, procure, transport, deliver, develop, erect, install, test and commission of project. Contracts of these kind are entered on premise to procure a functional Solar Power Plant as per specification of the owner for which there is a single lump sum price for the entire contract. Hence for convenience of contractor the said EPC contract cannot be split in two separate contracts one for supply of goods and another for supply of services and taxed accordingly. 6) An Overview of all makes us observe that the impugned transaction for EPC Co

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2018 (10) TMI 1141 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (18) G. S. T. L. 634 (A. A. R. – GST) – Levy of GST – cold storage for storing of agriculture produce out of cultivation of plants and poultry eggs which are produce of rearing of life animals/poultry farming.
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Whether charges received by the cold storage for providing service of storing of eggs, which is produce of rearing of animals/poultry farming in cold storage is exempted from payment of GST in terms of S. no. 24 of Notification No. 11/2017-CT (Rate) and S. no. 54 of Notification no. 12/2017CT (Rate) dated 28.06.2016?
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Held that:- Eggs are produced out of rearing of chicken (Poultry Farming) for food and as per definition of Agricultural Produce, any produce out of rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or

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of this order. The Issue raised by M/s. Shubhlaxmi Cold Storage And Ice Factory Pvt. Ltd, Sukhdham, Pushkar Road, Ramnagar, Ajmer (Raj.) 305004 (hereinafter referred to as Applicant also) is fit to pronounce advance ruling as it falls under ambit of the Section 97(2)(b) and (e), it is given as under: (b) Applicability of a notification issued under provisions of this Act. (e) Determination of the liability to pay tax on any goods or services or both Further, the applicant being a registered person, GSTIN is 08AACCS72951IZS, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the application is admitted to pronounce advance ruling. 1. SUBMISSION OF THE APPLICANT: M/s. Shubhlaxmi Cold Storage And Ice Factory Pvt. Ltd. has stated that it is having a cold storage for storing of agriculture produce out of cultivation of plants and poultry eggs w

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fresh eggs should not be chargeable under GST. 2. QUESTION(S) ON WHICH THE ADVANCE RULING IS SOUGHT The Applicant has sought ruling to be pronounced under section 97(2) (b) and (e) of the CGST Act 2017, on the following questions: Whether charges received by the cold storage for providing service of storing of eggs, which is produce of rearing of animals/poultry farming in cold storage is exempted from payment of GST in terms of S. no. 24 of Notification No. 11/2017-CT (Rate) and S. no. 54 of Notification no. 12/2017CT (Rate) dated 28.06.2016. 3. PERSONAL HEARING AND COMMENTS OF THE JURISDICTIONAL OFFICER In the matter, the applicant Mr. Anand Prakash Arora (Director) appeared for personal hearing on 15.09.2018. During the PH, he submitted a copy of GST Law and a judgment of Shriji Ice Factory vs. Commissioner of Central Excise, Jaipur-ll. They reiterated the submission already made in the application of Advance Ruling and further requested that the case may be decided at the earliest

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griculture produce. 4.2 The Applicant has sought Advance Ruling on applicability of Entry No. 24 of the Notification No. 11/2017 Central tax (Rate) dated 28/06/2017 and Entry No. 54 of the Notification No. 12/2017 Central tax (Rate) dated 28/06/2017. The applicant has sought advance ruling on matter whether charges received by the cold storage for providing service of storing of eggs, which is produce of rearing of animals/poultry farming in cold storage, is exempted from payment of GST. 4.3 Entry No. 54 of Notification No. 12/2017-CT(Rate) dated 28.06.2017 exempts Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of – (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out

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n of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. 4.4 Eggs are produced out of rearing of chicken (Poultry Farming) for food and as per definition of Agricultural Produce, any produce out of rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. Thus Fresh Eggs in shell on which no further processing is done are covered under definition of agricultural produce, 4.5 The Principal Bench of CESTAT

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2018 (10) TMI 1146 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (18) G. S. T. L. 652 (A. A. R. – GST) – Input Tax Credit – taxes paid on procurement of goods and services during the Construction period – work contract service – applicant is of the view that it is eligible to claim ITC of taxes paid on procurement of goods and services during the O & M period after reversal of input tax credit as per Section 17(2) Of the CGST Act read with Rule 42 of the CGST rules.
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Whether appellant is eligible to claim full ITC pertaining to procurement of goods and services for construction of the project during the Construction Period as the entire revenue received during the said period is subject to CST? – Held that:- The applicant is a supplier of works contract services for construction of an immovable property and goods and services received by them for construction of immovable property are not owned and capitalised by them, hence restriction contained under clause (c) & (d) ibid is

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d goods and services during the operation and maintenance period. If they are not supplying any exempted goods and services during the O & M periods the provision of section 17(2) of the CGST Act, 2017 are not applicable upon the applicant – The annuity received by the applicant isa payment of the remaining 50% of cost of the project in biannual equal installments on which the applicant would be paying GST during the construction periods. As the annuity so received by the applicant is taxable, there is no need to take apportioned credit under section 17(2) of the CGST Act, 2017.
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Ruling:- The applicant is rendering taxable services during the construction of roads which is liable to tax; hence they are entitled to claim full ITC under the provisions of section 16(1) of the CGST Act. 2017.
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The Applicant is entitled to claim ITC on supplies of goods and services or both procured for use in outward supply of O & M service purpose, as they are paying GST on 100 percent of the am

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dings were passed by any authority. Based on the above observations. the application is admitted to pronounce advance ruling. 1. SUBMISSION OF THE APPLICANT: (a) The Applicant also having Goods and Service Tax (GST) Registration Number 08AAFCN4743H1ZC has been engaged as a Concessionaire wherein the Public Works Department (PWD), Government of Rajasthan has granted concession to construct, operate and maintain the project during the Construction Period which shall commence from the appointed date and will end on Commercial Operation Date (COD) and operate and maintain it for further period of 10 years from the COD. (b) The applicant is a company incorporated as a Special Purpose Vehicle (SPV) and registered under the provisions of Companies Act, 2013 for the purpose of undertaking two-lining/intermediate laning of the sections of State highway (hereinafter referred to as Project) on design, build, operate /maintain and transfer (hereinafter referred to as DBOT ) basis under a contract

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and payable from the 180th day of COD. e. The applicant shall also receive Pi-annual payments towards O & M expenses calculated at a specified percentage of the project cost during the O & M period (hereinafter referred to as O &M Payments ) 3. The applicant s contention is that- 3.1 The applicant is of the view that it is eligible to avail full input tax credit (hereinafter referred as ITC) of taxes paid on procurement of goods and services during the Construction period. 3.2 The applicant is of the view that it is eligible to claim ITC of taxes paid on procurement of goods and services during the O & M period, after reversal of input tax credit as per Section 17(2) of the COST Act read with Rule 42 of the CGST rules. 4. Personal Hearing (PH) In the matter, personal hearing was given to the applicant, Ms Khushboo Kundalia and Mr. Madhav Kalani appeared as representative of the applicant for personal hearing on 10.08.2018 and submitted documents and notifications relate

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ded by the applicant is classifiable under SAC 9954 i e. composite supply provided to Central Government or any other local body for construction of civil structure. The Services by way of access to a road or a bridge on payment of annuity (SAC 9967) has been exempted under Notification 12/2017-CT (rate) dated 28.06.2017 by inserting entry No 23A vide notification No. 32/2017-CT(Rate) dated 13.10.2017. The Jurisdiction Officer is of the view that: (i) The construction of Roads and Bridges classifiable under SAC 9954 are liable to tax hence they are eligible to avail input tax credit on all goods and services used in the said construction. (ii) The applicant s contention that they are is not liable to pay tax for payment of annuity to access a road or a bridge (SAC 9967) vide entry 23A of Notification 12/2017-CT (rate) dated 28.06.2017 as amended vide notification No. 32/2017-CT(Rate) dated 13.10.2017. (iii) The contention of the applicant is tenable because the services provided by the

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D and the applicant, under which total length 397 KM road in the state of Rajasthan is to be augmented on design, build, operate and transfer (DBCDT) basis which shall be financed by the Applicant who shall recover its investment and cost through Annuity Payments and O&M payment to be made as per terms and condition set forth. 7.2 The applicant have sought the advance ruling as to (a) whether they are entitled to claim full Input Tax Credit on goods and services used for construction of the project during the construction period and (b) whether they are entitle to Claim ITCs pertaining to procurement of goods and services during the O & M period after reversal of ITC as per Section 17(2) of the Central Goods and Services Tax Act. 2017 read with Rule 42 of the Central Goods and Services Tax Rule. 2017 as Annuity Payment received during the said period is exempt whereas O & M payments received are subject to GST. 7.3 Before deciding the issue, it would be appropriate to appre

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ce, 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: 7.5 The applicant has been awarded work contract vide agreement dated 3.3.2017 on Private Pubic Partnership (PPP) basis in which the applicant have to invest 60% of cost of the project. The project is to be completed within 2 years. The applicant shall receive 50% of the project cost (i e cost of construction) during the construction period on the basis of achievement of milestones i.e. achieving specified percentage of physical progress. Thus, public share of 50% will be paid to the applicant during completion of the project. The applicant s share of 50% will be paid in 5 equal biannual installments along with interest starting from 180 days of COD. Thus the applicant is liable to pay applicable GST on the full value of the project during the construction period of 2 years. 7.6 Section 13 of

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n excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount. Explanation.-For the purposes of clauses (a) and (b)- (i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment; (ii) the date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. in view of the above the applicant is liable to pay tax at the time of issue of invoices or receipt of the payment whichever is earlier 7.7 The applicant is also awarded the work of Operation & Maintenance of the said project for the period of 10 years, During this period, the applicant will also receive 50% of the project cost, as annuity, alongwith interest. The applicant contend

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o such conditions and restrictions as may be prescribed and in the manner specified in section 49. be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person 7.9 Section 17 of the CGST Act, 2017 is related to apportionment of credit and blocked credit, Section 17 reads as under: 17. Apportionment of credit and blocked credits: 17. (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Serv

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d shall not be withdrawn during the remaining part of the financial year: Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles and other conveyances except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vehicles or conveyances ; or (B) transportation of passengers; or (C) imparting training on driving, flying, navigating such vehicles or conveyances; (ii) for transportation of goods; (b) the following supply of goods or services or both:- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or s

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r supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation.-For the purposes of clauses (c) and (d), the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; (e) goods or services or both on which tax has been paid under section 10; (f) goods or services or both received by a non-resident taxable person except on goods imported by him; (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of sections 74, 129 and 130. (6) The Government may prescribe the manner in which the credit referred t

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are not owned and capitalised by them, hence restriction contained under clause (c) & (d) ibid is not applicable for the applicant. 7.11 in the given facts and circumstances; we agree with the contention of the applicant for the first question that they are entitled to claim full ITC during the construction period. The applicant is paying applicable GST on full value of the project and they are not supplying any exempted goods and services during the construction period of 2 years, therefore they are entitled to claim full ITC paid on all eligible goods and services: 7.12 We do not agree with the contention of the applicant in respect of second question that they are entitled to claim ITC on procurement of goods and services after reversing the ITC under Section 17(2) of the CGST Act 2017 read with Rule 42 of the Central Goods and Services Tax Rule, 2017 as Annuity Payment received during the O & M period is exempted and payment received for O&M is subject to GST. As discu

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2018 (11) TMI 887 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 124 (A. A. R. – GST) – Levy of IGST – Zero-rated supply – testing services provided to its overseas group entities – place of supply – export of services or not – Held that:- In the subject case it is seen that the supplier of service is in India and the receiver of the service is outside India and therefore as per Section 7(5) of the IGST Act we find that the supply of service in this case shall be treated as a supply of service in the course of Inter-State trade.
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Applicability of provisions of Section 2(6) of the IGST Act – export of service – zero rated supply – Held that:- There is no doubt that the, supply of service in the present case satisfies clauses (i), (ii), (iv) and (v) of Section 2(6) of the IGST Act. However to qualify as an export all the conditions must be satisfied and therefore we now take upon ourselves to discuss whether the applicant also satisfies clause (iii) i.e. whethe

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to them in India by their overseas clients in respect of prototypes after due examination and testing of these prototypes. From a reading of the agreement it is very clear that the testing activities that are carried out include Functional tests, Electrical tests, Mechanical tests, Life cycle tests, Endurance tests, Illumination tests, Environmental tests, Software tests, Product robustness tests, etc. – The facts and situation in the present case clearly attract the provisions of Section 13 (3)(a) of the IGST Act and therefore it can be inferred that the said services of testing of the protypes, which are physically made available by the service receiver to the service provider, are provided in India and therefore liable to tax.
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In the present case it can safely be inferred from a reading of the provisions of Section 13(3) that the services supply of which has been rendered by the applicant to their overseas client as per the agreement is taxable under IGST Act.
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Applicant

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testing purposes, the tests could not have been conducted and therefore no reports could be generated – thus, the facts of the SGA case are different from the facts of the subject matter.
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Ruling:- The testing services being provided by the applicant in the present case is liable to IGST and cannot be treated as zero rated supply. – GST-ARA-172018-19/B-116 Dated:- 15-9-2018 – SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST ] by Behr-Hella Thermocontrol India Pvt. Ltd., the applicant, seeking an advance ruling in respect of the following question. Whether in the facts and circumstances of the case, the Applicant is liable to pay Integrated Goods a

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egistered office of the Applicant is situated at Elpro Compound, City Survey No. 4270, Chinchwadgaon, Pune – 411 033. The Applicant is a 100% subsidiary of Behr-Hella Thermocontrol GmBH, Lippstadt, Germany (hereinafter referred to as BHTC Germany ). The Applicant is registered under GSTIN No. 271800000581ARQ. 2. In the normal course of business, the Applicant has entered into service agreements with BHTC Germany and its other overseas group entities such as Behr-Hella Thermocontrol, Inc. (hereinafter referred to as BHTC USA ) and Behr-Hella Thermocontrol (Shanghai) Co. Ltd. (hereinafter referred to as BHTC Shanghai ), inter alia, for providing testing services. Hereto annexed and marked as Exhibit A is the copy of the Service Agreement entered into by the Applicant with BHTC Germany. 3. The testing services provided by the Applicant are in relation to the prototype goods supplied by the overseas group entities to determine whether the products so tested function in accordance with the

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application, and accordingly, the Applicant submits this Advance Ruling application to the Hon ble Authority for Advance Ruling. The Applicant craves leave to submit such further facts as may be relevant after admission of the application or at the time of hearing. Statement containing the applicant s interpretation of law and/or facts. as the case may be. in respect of the questions(s) on which advance ruling is required In light of the facts of the case (as explained in Annexure I) and the question in respect of which the Applicant seeks an Advance Ruling, the Applicant s interpretation of facts and law in respect of the aforesaid questions is as follows: Question: Whether in the facts and circumstances of the case, the Applicant is liable to pay Integrated Goods and Services Tax on the testing services provided to its overseas group entities, being a zero-rated supply? Applicant s submissions 1.1 With effect from 01 July 2017, indirect tax regime in India has shifted from multiple t

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pt of destination based tax on consumption? Ans. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. 1.3 Section 7(5) of the Integrated Goods and Service Tax Act, 2017 (hereinafter referred to as the IGST Act ) provide that supply of service shall be treated as a supply of service in the course of inter-State trade or commerce when the supplier is located in India and the place of supply is outside India, 1.4. As per Section 16 of the IGST Act, export of service shall qualify as Zero rated supply and can be supplied without payment of IGST. 1.5 Thus, even if a supply is in the course of inter-State trade or commerce, the same can be supplied without payment of IGST if it qualifies as an export of service. 1.6 In terms of Section 2(6) of the IGST Act, a supply of service shall qualify as export of service when: (a) the supplier of service is located in India; (b) the recipient of service is located ou

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ere no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both. ********* (105) supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied. ********* 1.8 In the facts and circumstances of the present case, it is not in dispute that the Applicant is the supplier of services in terms of Section 2(105) of the CGST Act, and the overseas group entities, being liable to pay the consideration for the services supplied by the Applicant, are the recipient of services in terms of section 2(93) of the CGST Act. 1.9 Thus, condition provided und

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f the IGST Act is also satisfied. 1.15 Now the only condition that needs to be satisfied for the testing service provided by the Applicant to its overseas group entities to qualify as export and therefore a zero rated supply which can be supplied without payment of IGST is whether the place of supply is outside India. 1.16 Hence, the place of supply is relevant to decide the taxability and the status of taxability of the testing services provided by the Applicant to its overseas group entities. 1.17 The provisions for determining the place of supply of services are contained under Section 13 of the Integrated Goods and Service Tax Act, 2017 (hereinafter referred to as the IGST Act ). The relevant extracts of Section 13 of the IGST Act are reproduced below for ready reference: Place of supply of services where location of supplier or location of recipient is outside India. 13. (1) The provisions of this section shall apply to determine the place of supply of services where the location

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further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; *********** 1.18 The terms location of the recipient of services and location of the supplier of services have been defined under Section 2(14) and Section 2(15) of the IGST Act as under: Definitions 2. In this Act, unless the context otherwise requires, – ******** (14) location of the recipient of services means,- (a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; (c) where a supply is received at more than one establishment,

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) of the CGST Act as under: Definitions 2. In this Act, unless the context otherwise requires, – ******** (113) usual place of residence means- (a) in case of an individual, the place where he ordinarily resides; (b) in other cases, the place where the person is incorporated or otherwise legally constituted; 1.20 In view of the above, while the location of the Applicant is in India in terms of Section 2(15)(a) of the IGST Act, the recipient of services (i.e., the overseas group entities) are located outside India in terms of Section of the IGST Act. 1.21 Further, a bare perusal of Section 13 of the IGST Act would reveal that generally, the place of supply of services shall be the location of the recipient of services in terms of Section 13(2) of the IGST Act, except in case of the services specified in sub-sections (3) to (13) of Section 13 of the IGST Act. 1.22 The Applicant understands that sub-sections (4) to (13) of Section 13 of the IGST Act are irrelevant in the present case for

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submit a test report and the contractual obligation of the Applicant towards overseas group entities in terms of the provision of testing services is complete only when the test reports are delivered to them. In other words, the provision of service is complete only when the test report is delivered to the overseas group entities. 1.27 It is submitted that the delivery of the test report by the Applicant to its overseas group entities is the most Important part of the services rendered by the Applicant. In fact, the overseas group entities, as recipient of Services, are expecting the test report and nothing apart from that. 1.28 As stated above, GST is a destination based tax on consumption of goods and services. Further, Services are something intangible in nature. Thus, service is something which is not visible but the person receiving the same is deriving some benefit from its performance. Thus, GST is levied where the service is actually getting consumed. 1.29 It is submitted that

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of service is the provision of the test report. 1.31 Further, there is no compulsion on the Applicant to return the prototype goods to the overseas group entities which further confirms that the overseas group entities are not concerned with the goods. Therefore, the actual consumption of the testing services performed by the Applicant is happening outside India in the form of the test reports. 1.32 The aforesaid position is further substantiated by the second proviso to Section 13(3)(a) of the IGST Act which provides that even though the repairing of goods is done in India, the place of supply shall be outside India if the goods after repairs are exported out of India. The rationale behind such exclusion appears to be that no GST should be levied as the goods will be ultimately used or consumed outside India. 1.33 The above contention is also supported by the judgment of the Hon ble Bombay High Court in the case of Commissioner of Service Tax, Mumbai – II v. SGS India (P.) Ltd. repor

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abroad intended to import from India. In other words, the clients abroad were desirous of confirming the fact as to whether the goods imported complied with requisite specifications and standards. Thus, client of the respondent located abroad engaged the services of the respondent for inspection and testing the goods. The goods were tested by the respondents in India. The goods were available or their samples were drawn for such testing and analysis in India. However, the report of such tests and analysis was sent abroad. The clients of the respondent were foreign clients, paid the respondent for such services rendered, in foreign convertible currency. It is in that sense that the Tribunal holds that the benefit of the services accrued to the foreign clients outside India. This is termed as export of service . In these circumstances, the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as export of service . Such

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he record. If the emphasis is on consumption of service then, the order passed by the Tribunal does not raise any substantial question of law. 1.34 The aforesaid judgment of the Hon ble Bombay High Court has been followed by it in the case of The Pr. Commissioner of Mumbai Commissionerate v. QIndia Investment Advisory Pvt. Ltd. reported in 2017-TIOL-2171-HC-MUM-ST = 2017 (10) TMI 754 – BOMBAY HIGH COURT. 1.35 Since GST is also a destination based consumption tax on goods and services, relying upon the judgment of the Hon ble Bombay High Court in SGS India Ltd, (supra) and Qlndia Investment Advisory Pvt. Ltd. (supra), it is submitted that the place of supply in case of the testing Service provided by the Applicant to its overseas group companies is also outside India. 1.36 In this regard, it is further submitted that even if the services are provided from India, since the actual consumption of the testing services is taking place outside India, the place of supply of services ought to b

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ttgart, register court HRB 20260, and its principal place of business at Hansastraße 40, 59557 Lippstadt, Federal Republic of Germany, represented by its Managing Directors Mr. Thomas Schulte and Dr. Andreas Teuner (hereinafter called BHTC ) of ONE PART AND Bebr-Hella Thermocontrol India Private Limited, a Company incorporated in India and having its Registered Office at Elpro Compound, City Survey No. 4270, Chinchwadgaon, Pune – 411033, India,, represented by its Director and CEO Mr. Shrivardhan Gadgil (hereinafter called BHTCIN ) of OTHER PART. Whereas – a) BHTC, IN was incorporated on February 10, 2006. BHTCIN is in the process of undertaking activities as developer, manufacturer, producer, purchaser, seller, importer, exporter, distributor, dealer, commission agent and market representatives of all kinds of Control Equipment and Units for Air conditioning and Climate Control systems and to render services related to design, development and testing of Control Equipments and Cl

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e services related to man and machine resources as per requirement of BHTC (hereinafter referred to as Services ); and d) BHTC and BHTCIN mutually desire to set forth in this Agreement certain terms and conditions applicable to all such engagements; Now it is hereby agreed as follows: 1. Scope, Duties and Responsibilities of BHTCIN a. BHTCIN shall recruit and maintain duly qualified, skilled and experienced resources to provide services to BHTC and its group companies as agreed in the beginning of each calendar year with BHTC. These services will be provided from BHTCIN facility or on-site as per requirement of BHTC or its affiliates. b. BHTCIN will track its resources in the manner agreed with BHTC and will ensure that the time booking is done properly on respective projects, BHTCIN is expected to take care that their own project hours are not captured on BHTC projects. BHTC will receive corresponding documentation which will be a matter of a separate, operational notification. c. BHT

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services required from BHTCIN in the beginning of each calendar month covering next three months outlook of the project jobs which could be assigned to resources at BHT CIN c. The technical coordinators at BHTC shall work closely with Dianagers/ supervisors at BHTCIN and will be responsible for the quality of deliverables and the project timelines. d. BHTC will support BHTCIN for building competencies and enhance efficiency and productivity through sufficient workloads, exposure to now projects/ technologies, training and mentoring. BHTC will plan and send its experts to visit BHTCIN for technical training of resources at its own costs and the same will be invoiced separately from: BHTC to BHTCIN. e. BHTC will help BHTCIN to develop an induction training program for the new resources hired at BHTCIN which will define the initial training roadmap and also the time period after which they will be considered eligible for working on the projects. Such training costs will be bome by BHTCIN

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site at BHTC Lippstadt or at any other location. (BHTC will receive corresponding documentation) Except as expressly agreed with BHTC, BHTCIN shall bear all of its own expenses arising from its performance of its obligations under this Agreement, including (without limitation) expenses for facilities, work spaces, training, utilities and the like. 4. Ownership and Rights In relation to jobs received by BHTCIN from BHTC, all original and intermediate written material, including programs, documentation, CDs, diskettes, listings and any other material generated by BHTCIN personnel for BHTC shall belong exclusively to BHTC. 5. Confidentiality a. Except as provided by clause 5(b) herein below, BHTC and BHTCIN shall at all times during the currency of this Agreement and thereafter: i. Use their best endeavours to keep all Restricted Information confidential and accordingly not to disclose any Restricted Information to any other person; and ii. Not use any Restricted Information for any purpo

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n ownership of the BHTCIN as soon as the change is more likely than not. Upon notice of a pending change in ownership BHTC reserves the right to change the terms and conditions of this agreement without any concurrence of BHTCIN. 9. Term and Termination: a. This Agreement supersedes the Service Agreement between BHTC and BHTCIN dated January 1, 2012 and amendments thereof and shall come into force on the date of its execution and shall lasts until 315 December 2015 and will be automatically renewed if none of the parties terminates within ninety (90) days in advance. b. If BHTCIN Commits any act of insolvency or any provision for winding up is admitted against BHTCIN, BHTC shall be entitled to forthwith terminate this Agreement. c. If BHTCIN commits a material breach of the provisions of this Agreement which is not cured within thirty (30) days of the date of receipt of a cure notice by BHTCIN, BHTC shall be entitled to terminate this Agreement. 10. Force Majeure If the performance of

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ications All amendments or modifications to this Agreement must be in writing, identified as an amendment to this Agreement and signed by an authorized representative of each Party 13. Governing LAW This Agreement Shall be subject to the laws of the Federal Republic of Germany. For all claims arising out of or in connection with this Agreement – as far as statutorily allowed -, the courts competent for Behr-Hella Thermocontrol GmbH domicile shall have jurisdiction. Additional submissions 06.09.2018 WRITTEN SUBMISSIONS 1. At the outset, the Applicant expresses their gratitude to this Hon ble Authority for Advance Ruling for granting a patient hearing to the Applicant on 29 August 2018. Pursuant to the liberty granted, the Applicant hereby makes the following submissions in addition and without prejudice to the submissions made in the Application dated 19 June 2018 and during the course of the hearing on 08 August 2018 and 29 August 2018. BRIEF FACTS: 2. Behr-Hella Thermocontrol India Pv

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f the application. The Said submissions are summarized as follows: (i) The services of testing of the prototypes provided by the Applicant to its group companies are appropriately classified under Section 13(2) of the Integrated Goods and Services Tax Act, 2017 ( IGST Act ); (ii) The services of testing of prototype and providing the report based on which mass production is undertaken is more in the nature of advisory/ consultancy service, rather than the services prescribed under Section 13(3) of the IGST Act which, inter alia, entail provision of service on the goods made available physically by the recipient of service and which are subsequently returned to the recipient. The classic examples of services prescribed under Section 13(3) of the IGST Act are repair of car, maintenance of machines etc.; (ii) The service of the Applicant is not complete until the report is delivered to the overseas group companies, i.e., the recipients of services. The said recipients of services are inte

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vice tax regime, as applicable prior to 2012, i.e., prior to the negative list based approach of taxation of services, the conditions prescribed for qualifying as export of services were laid down in the Export of Services Rules, 2005, The relevant extracts Of the Export of Services Rules, 2005 are reproduced below: 3. Export of taxable service. – The export of taxable service shall mean, – ****** (2) in relation to taxable services specified in sub-clauses (a), (), (h), (i), (i), (1), (m), (n), (o), (s), (t), (u), (w), (x), (y), (2), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zu), (zw), (zza), (zzc), (zzd), (zzp, (zzg), (zzh), (zzi), (zzj), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzu), (zzw), (zzx) and (zzy) of clause (105) of section 65 of the Act, Such services as are performed outside India: Provided that if such a taxable service is partly performed outside India, it shall be considered to have been performed outside India; Provided further that for the

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ance of service to the location of the recipient of service. G. The aforesaid amendment indicates that the intention of the legislature at all times was to treat the said testing and analysis services, the report for which was issued to the overseas service recipient as export of service, based on the location of the recipient of service. The key factor being that service tax was a destination based consumption tax and the services with regard to the said testing were being consumed outside India, The Frequently Asked Questions (FAQs) to the Central Goods and Services Tax Act, 2017 published by the CBI&C states that Goods and Services Tax is also a destination based consumption tax and hence, the same intent should be applicable to the Goods and Services Tax law as well. The copy of the Export of Service Rules, 2005 (prior and post the amendment of 2011) is annexed at page numbers 6 to 16 Of the second compilation of documents. The copy of the FAQs to the Goods and Services Tax Act

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service, or to a person acting on behalf of the provider of service, in order to provide the service: Provided that when such services are provided from a remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of service: Provided further that this clause shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs and are exported after the repairs without being put to any use in the taxable territory, other than that which is required for such repair (b) services provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service. I. In view of the aforesaid, it is submitted that the provisions of Section 13(3) and 2(6) of the IGST Act are s

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ntended to import from India. In other words, the clients abroad were desirous of confirming the fact as to whether the goods imported complied with requisite specifications and standards. Thus, client of the respondent located abroad engaged the services of the respondent for inspection and testing the goods. The goods were tested by the respondents in India. The goods were available or their samples were drawn for such testing and analysis in India. However, the report of such tests and analysis was sent abroad. The clients of the respondent were foreign clients, paid the respondent for such services rendered, in foreign convertible currency. It is in that sense that the Tribunal holds that the benefit of the services accrued to the foreign clients outside India. This is termed as export of service . In these circumstances, the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as export of service . Such an act do

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submitted that said judgment in the case of SGS India Pvt. Ltd. (supra) has been followed by the Hon ble Bombay High Court in the case Of QIndia Investment Advisory Pvt. Ltd. reported in 2017-TIOL-2171-HC-MUM-ST = 2017 (10) TMI 754 – BOMBAY HIGH COURT. The copy of the said judgment has been attached at page 31 of the first compilation of documents. L. The aforesaid two judgments are issued under the Export of Services Rules, 2005. The Hon ble Tribunal, in Commissioner of Central Excise, Pune-l v/ s. Sai Life Sciences Ltd. reported in 2016 (42) STR 882 (Tri.- Mum.) = 2016 (2) TMI 724 – CESTAT MUMBAI relying upon the judgment of SGS India Pvt. Ltd. (supra) has held that even for the period post 01 July 2012, i.e., post the insertion of the Place of Provision of Services Rules, 2012 and the negative list based taxation of services, the testing services provided to overseas entities wherein the report is sent outside India qualify as export of services. A copy of the said judgment of Sai

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50) ELT 514 (Bom.) = 2017 (3) TMI 347 – BOMBAY HIGH COURT; (Ill) Shree Sai Vamika Industries v/ s. Union of India reported in 2017 (347) ELT 93 (Gau.) = 2015 (12) TMI 1778 – GAUHATI HIGH COURT The copies of the said judgments are attached at pages 31 to 36 of the second compilation of documents. In view of the aforesaid, it is submitted that the place of supply of the testing services provided by the Applicant is outside India and the testing services qualify as export of service in terms of Section 2(6) of the IGST Act. 03. CONTENTION – AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- M/s. Behr Hella Thermocontrol India Pvt. Ltd. have raised the following question on which advance ruling is required. Whether in the facts and circumstances of the case, the applicant is liable to pay Integrated Goods and Services Tax on the testing services provided to its overseas group entities, being a zero-rated supply? Above question of M/s. Behr Hella Thermo

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ices to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; (b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. The applicant has entered into service agreement with BHTC Germany. The prototype goods are supplied by BHT

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ction 8; The applicant satisfies the clauses of sec(2)(6) and as the place of supply of service is outside India, this office is of the view that the applicant is not liable to pay Integrated Goods and Services Tax on the testing services provided to its overseas group entities. The applicant may carry out export of service under LUT/Bond without payment of IGST or may carry out export with payment of IGST and claim refund later on. 04. HEARING The case was taken up for preliminary hearing on dt. 13.06.2018, with respect to admission or rejection of the application when Sh. Prasad Paranjape, Advocate along with Sh. Arun Jain, Advocate appeared and requested for admission of application as per their contentions in ARA application. They were specifically informed that the question that they have raised in application is with respect to place of supply which is not covered in the scope of section 97 of CGST Act and therefore cannot be entertained. Accordingly they were requested to immedi

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ne Division, Pune appeared and made written submissions. 05. OBSERVATIONS 5.1 We have perused the records on file and gone through the facts of the case and the submissions made by the applicant and the department. 5.2 facts of the subject matter are that the Applicant has entered into service agreement for providing testing services in relation to the prototype goods supplied by their overseas clients. The tests are directly carried out on the prototype goods provided by the overseas group entities and based on the same Applicant prepares the testing report and sends across the said report to their overseas clients by way of emails. The prototype goods are usually not sent back and the Applicant receives the consideration in convertible foreign exchange. The issue that has been raised by the applicant is with respect to place of such supply of services rendered by them. They are contending that the place of supply is outside India and therefore such services have been exported by them

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port of services means the supply of any service when,- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 5.6 There is no doubt that the, supply of service in the present case satisfies clauses (i), (ii), (iv) and (v) of Section 2(6) of the IGST Act. However to qualify as an export all the conditions must be satisfied and therefore we now take upon ourselves to discuss whether the applicant also satisfies clause (iii) i.e. whether the place of supply in the subject case is outside India. We agree with the applicant that the place of supply is relevant to decide the taxability and the Status of taxability of the

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es are actually performed, namely:- (a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs (b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, w

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vice provider, are provided in India and therefore liable to tax. 5.9 The argument of the applicant is that the services provided by the applicant in this case, as per the agreement, are completed only when the test reports are sent to their overseas clients is not tenable for the reason that first of all the service of testing provided by the applicant on the basis of examination and physical verification of prototypes is in respect of verification of traits, characteristics and defects, if any, in respect of prototypes sent to the applicant and this service of testing is over once on the basis of examination and verification of prototype, the test report is generated and sent via mail as stated by the applicant and therefore provision of testing service is over and it is clear as per detailed discussions above, that the service is completed and is clearly provided in India. Thus the event and provision of testing service is over and the service is clearly provided in India as per Sec

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ed from a reading of the provisions of Section 13(3) that the services supply of which has been rendered by the applicant to their overseas client as per the agreement is taxable under IGST Act. 5.10 Further we specifically find that in the SGS case cited by the applicant, the facts are different. In that case the overseas clients of SGS used the services of SGS in inspection/ test analysis of the goods which the clients located abroad intended to import from India. The tests were conducted on sample goods and the said goods were not made physically available by their overseas client. In fact the overseas clients would import the goods only after the goods were tested by SGS and a report was sent to that effect. The import would occur only the reports sent were found to confirm that the goods imported complied with requisite specifications and standards, In the subject case the situation is different. Here the overseas client had made the goods physically available to the applicant in

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2018 (12) TMI 1275 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI – Classification of supply – Composite supply or mixed supply – Transfer of right to use – activities / transactions of renting of workwear – Transfer of right in goods or not – entry 5 (f) of Schedule II of Central Goods and Services Act, 2017.
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Held that:- It is clear that for the contractual period, the ownership of the workwear rests with the applicant and only the right to use the workwear is intended to be passed on to the customer for the period of contract – the activity of renting workwear qualifies as ‘transfer of the right to use’ any goods for any purpose (whether or not for a specialized period) for cash, deferred payment or other valuable consideration and thus would be categorized as supply of services within the meaning of entry 5(f) of Schedule II of the GST Act.
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Renting of work wear along with other services such as transportation, weekly washing etc – The provision of renting of workwear

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.
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Ruling:- The activities/transactions of renting of workwear qualify as “transfer of right to use” of goods in terms of entry 5 (f) of Schedule II of Central Goods and Services Act, 2017.
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The supply of renting of workwear along with other services such as transportation, weekly washing etc. for a single consideration is a mixed supply under section 2 (74) of CGST Act. – GST-ARA-43/2018-19/B-115 Dated:- 15-9-2018 – SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Lindstrom Services India Private Limited, the applicant, seeking an advance ruling in respect of the following questions. 1. What is the classification of the activities t

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he transaction undertaken by the Applicant Company qualifies as composite supply , (i) What will be the principle supply for the purpose of section 2 (90) of CGST Act? (ii) What will the applicable rate of GST? (iii) Whether the conclusion (i.e. the transaction is a composite supply ) will remain the same if in addition to the services covered in question no. 2 above Applicant Company also provides additional service of renting of locker as part of the same consideration? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/ MGST Act would be mentioned as being under the GST Act . 02.

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her optional services such as locker facility, modification and changes, sales of logos etc. for the workwear to its customers on need basis. 3. At present, the Applicant Company has operations in multiple locations in India i.e. Faridabad, Panchkula (Haryana), Mumbai, Pune (Maharashtra), Hyderabad (Telangana), Vishakhapatnam (Andhra Pradesh), Chennai (Tamil Nadu), Kolkata (West Bengal), Bangalore (Karnataka), Tinsukia (Assam) and Vadodara (Gujarat). Towards carrying out the aforesaid activities, the Applicant Company enters into agreements with its customers for leasing / renting of workwear and services ancillary to the renting of workwear such as transportation, weekly cleaning and repairs etc. of the workwear and other optional services such as lockers, modification etc. 5. Broad types of activities carried out by the Applicant are as follows: Sr.No. Type of activities carried out by the Applicant Remuneration structure 1. Renting of workwear 1. Weekly rental is charged for renting

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tomer on request of the customer and includes services such as (i) renting of locker, sales of logo(s) and nametag(s) and modification to the workwear etc. as per customer(s) specification. Lindstrom India chargers separate consideration for any additional service provided to the customer. 6. It is noteworthy that renting of workwear are usually long-term i.e. perpetual or for 12 months period and the same may be extended as per the mutual consent of the parties involved. It is also noteworthy that in the event of termination of the agreement between the customer and Lindstrom India, the customer will be liable to purchase all the garments that have been in use and the stock maintained for him. 7. In the below paragraphs we have discussed the business activities of the Applicant Company in detail. B.1 Renting/leasing of workwear and other ancillary services provided for a single consideration 8. Renting of workwear is the main/ primary business activity undertaken by Lindstrom India. L

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rs for specified purpose of packing and transportation of the workwear. These equipment s are to be returned back to Lindstrom by the customer on termination of the agreement. b. Lindstrom India is also providing services of weekly servicing of the workwear to its customer. Servicing of workwear includes washing, inspection, finishing and minor repairs of the workwear. Lindstrom India and its customer agree to workwear to a collection point which is in agreement of both the parties at a schedule time on weekly basis. In case after servicing of the workwear they are found to be not of the quality standards of Lindstrom India, Lindstrom India replaces such workwear Note No. 1: – For the activities mentioned above in para B.1 Lindstrom India charges a single consideration from its customer on weekly basis. Note No. 2: – In some other agreements Lindstrom India may also provide additional service of renting of locker as part of the service for a single consideration. Renting of lockers has

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workwear rented to the customer. For attaching the customer s logo on the workwear, the Applicant Company charges a fixed amount from the client. C. Replacement/exchange of the workwear: In case the workwear provided to the customer become unfit for use due to normal wear and tear or customer wants to replace the workwear originally rented to him against a new collection of workwear having new improved design, Lindstrom India on the request of the customer replaces/ exchanges such workwear. Lindstrom India charges redemption price from its customer for replacement of workwear. Price to be charged for such replacement keeping in mind the age of the workwear provided to the customer. d. Modification of workwear: Lindstrom India offers services of modifications of workwear to its customer such as adding extra pockets to the garments, shortening of sleeves, addition of extra push buttons on the garments etc. alteration and modifications are done as per the specific requirement of customer

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paint stains or exceptionally quick wear. Product is lost while in the customer s possession. Product returned to the warehouse has undergone modifications requested by the customer, due to which it cannot be returned to its original form. Product returned to the warehouse cannot be rented further because of its condition f. Changing number of garments: Customer may increase or decrease the number originally rented. The agreed number of workwear can be either be increased by placing additional order with the Applicant Company or decreased by returning the excess garments. In case, the service volume leased from the Applicant Company is reduced by more than 30% from the highest volume of the past 6 months, customer will be required to pay compensation to Lindstrom India in accordance with redemption policy. g. In the above para we have explained/covered different types of business activities entered by the Applicant Company for your reference and/or understanding of the business of the

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ves leave to add, alter or amend all or any of the submissions mentioned above and to lead such oral and/ or documentary evidence as may be considered necessary. Eligibility to file application for Advance ruling 2. In the present case, since the advance ruling is sought by the Applicant Company for the question covered by Section 97 and Section 98 of the CGST Act and MGST Act and also the said question is not pending or deiced elsewhere in the case of Applicant Company, it is submitted that the Applicant Company is eligible to file advance ruling and the instant application is admissible. Transaction carried out by the Applicant Company in relation to renting of workwear amounts to transfer of right to use of goods 3. The expression transfer of right to use has been employed in Article 366(29A) of the Constitution of India and also under the erstwhile Value Added Tax legislations and under the provisions of the Finance Act, 1994 (in so far as they are relevant for Service Tax purposes

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greement. 7. Based on above legal provisions, the Applicant Company respectful submits that the services of renting of workwear provided by it amounts to transfer of right to use of the workwear to respective customers, which activity / transaction is covered under entry 5 (f) of the schedule II of the CGST Act. This submission of the Applicant Company is based inter alia on following factual aspects: (a) Ownership of the workwear remains with the Applicant Company throughout the contract but effective control and possession is transferred to respective customers, (b) The Applicant Company has exclusive right to wash and maintain the workwear and maintaining inventory of workwear because the subject workwear are industrial products prepared based on specifications prescribed by each customer and needs to be washed and serviced industrially, (c) Each workwear is designed and prepared specifically for a customer based on the desired specifications and size and in case of any cancellation

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ilable for delivery Yes. The workwear is available for delivery to customers 2. There must be consensus ad idem as to the identity of the goods Yes. The customer and the Applicant Company are aware of goods (being workwear), which are separately identifiable 3. The transferee should have a legal right to use goods Yes. The customers have sole legal right to use the goods 4. For the period for which the transferee has legal right, it has the to be the exclusion of transferor Yes. During the period such work wear are supplied by Applicant Company to the customers, such work wear can be exclusively used by the customers and the Applicant Company has no legal right over the workwear. 5. Owner cannot again transfer the same right to others Yes. During the term of the agreement the workwear cannot be transferred by Applicant Company to any other person as such workwear are stitched as per fitting of respective employees and therefore cannot be transferred by Applicant Company to any other pe

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or supply of services. Entry 1 (b) and Entry 5 (f) of Schedule II of CGST Act deals with transfer of right in goods without transfer of title and transfer of right to use of goods for any purpose for a consideration respectively. In both cases, the transaction shall qualify as supply of services. Relevant portion has been reproduced below: Schedule II- Activities to be treated as supply of goods or supply of service 1. Transfer (b) any transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of service 5. Supply of services (f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. 12. Without prejudice to the aforesaid submissions, it is submitted that even if it is assumed for the sake of argument that the transaction undertaken by the Applicant Company falls short of amounting to transfer of right to use of goods, still in the respe

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the customers to possess, control, use and in other identified ways enjoy workwear will qualify as transfer of right to use of goods under Entry 5 (f) of Schedule II of CGST Act. Thus, in terms of Entry 5 (f), this transaction will also be considered as supply of service under GST laws. Even if the transaction do not qualify as transfer of right to use of goods it is shall qualify as transfer of right in goods without transfer of title, which is also treated as supply of service under GST laws. Composite supply V. Mixed Supply under GST laws 16. The taxable event under GST law is the supply of goods and services. Classification of a supply is essential to charge the applicable rate of GST on a particular supply. On a few occasions, certain transactions require supply of a combination of services or combination of goods or combination of both goods and services that maybe taxed at different GST rates. 17. In view of the above, GST laws require that such supplies should be classified as

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s essential character and whether services cannot be separated follows. 21. The concept of composite supply as envisaged under GST laws is identical to the concept of bundled services existing under the erstwhile service tax regime. The term naturally bundled stems from the erstwhile service tax regime. As per service tax laws, a bundled service means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. In order to understand the concept and the principles to determine bundled services, reliance has been placed on Taxation of Services, an Education Guide 2012, dated 20 June 2012 issued by the Central Board of Excise & Customs ( Education Guide ). As per the Education guide, an illustrative list of indicators, not determinative but indicative of bundling of services in the ordinary course of business, are: Whether there is a single price or the customer pays the

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mpany are expected to be provided as a package since such workwear are industrial products and are required to be industrially washed, maintained etc. Lindstrom India is having the required machinery and techniques to carry out such industrial washing etc. b. Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. Lindstrom India is the market leader in providing such services and these services are provided by Lindstrom as a package to its customers therefore this condition will automatically get fulfilled, C. The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidentally or ancilla

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romising two supplies should be considered as supply of two or more distinct and independent supply or a single supply of service. In the case of Card Protection Plan Ltd. ( CCP ) v/s Commissioner of Customs and Excise Dated 25 February 1999 [case C-349/96] CCP along with services related to its credit card operations was providing services of insurance coverage of damage resulting from loss of credit card. In the above case European court of justice ( IECJ ) held that in order to determine whether the taxable person is supplying the customer with several distinct principle services or with a single service the essential features of the transaction must to ascertain. According to ECJ a supply would be considered as single supply of service where one of the element of the supply is considered as principle service and one or more element is regarded as ancillary to such principal service. A service must be regarded as ancillary to the principal service of it does not constitute for custo

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f workwear gives the bundle its essential character. Intent of the arrangement between Lindstrom India and customers is renting of workwear for industrial purpose. Supplying the various heads of services that are ancillary to the renting of workwear by Lindstrom India is with the fundamental purpose of supplying the core service of providing workwear to its customers and maintain the same as per terms of the agreement. f. The main/core services provided by Lindstrom India to customers appears to be of renting and maintaining of industrial workwear to customers. In other words, the aim of customers is to receive agreed number of workwear from Lindstrom India stitched and maintained as per agreed terms to be used by workers of the customers. Therefore, the renting of workwear provided by Lindstrom India appears to be bundle of services, where other additional services such as weekly washing, washing, locker facility, transportation etc. are provided in conjunction with the core service o

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led with the principle supply of renting of workwear. The said services can be construed as ancillary services provided in conjunction with the principle service to render the main/ core service. However, the ancillary services are integral to one overall supply i.e. renting of workwear and cannot be separated from the main service. Therefore, the services qualify to be naturally bundled services provided in conjunction of each Other they will be covered under as composite supply under Section 2 (30) of the CGST Act. Mixed Supply 23. As per section 2(74) Of the CGST Mixed supply has been defined as follows: Mixed Supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. A bare reading of the above definition suggests that to qualify as a mixed supply, the supplies shall be individual supplies of goods or services and n

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ant portion is reproduced below: The taxability of a bundled service shall be determined in the following manner: 1. if various elements of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which gives such bundle its essential character; 2. if various elements of such service are not naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which results in highest liability of service tax 26. Furthermore, taxability of composite supply is covered under section 8 of CGST Act. Relevant provision is reproduced below: Section 8 of CGST: – composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply and the whole consideration shall be leviable to GST at the rate applicable on the principal supply. Section 2 (90) CGST: Principle supply means the supply of goods and services which consti

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thes or apparel. 28. Further, it must be noted that rate of tax applicable on apparel/clothes is also dependent on the sales value or sales price of the goods in question which is elaborated as follows: Goods GST Rate Articles of apparel and Clothing accessories, knitted or crocheted, of sale value not exceeding INR 1000 per piece 5% If exceeding INR 1000 per piece 12% Articles of apparel and clothing accessories, not knitted or crocheted, of sale value not exceeding INR 1000 per piece 5% If exceeding INR 1000 per piece 12% 29. Keeping in mind the above section in the present case, since the primary activity of the Lindstrom India is renting of workwear which is predominant element of the services provided by Lindstrom India to its customers and other services provided along with renting of workwear for a weekly consideration (rental) are ancillary supplies. Therefore, the principal supply of the composite supply in the case of Applicant Company should be renting of workwear and the ra

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). Renting of workwear along with other ancillary services mentioned in Para B.1 or (b) Renting of workwear along with ancillary services and locker facility to its customer by the Applicant company for a single consideration is considered as mixed supply of services under GST, entire bundle of services shall be deemed to be against supply of service which attracts the highest rate of tax and accordingly the whole consideration shall become chargeable to GST at such highest rate. PRAYER In view of the foregoing, it is prayed that this Hon ble Authority be pleased to hold, adjudge and declare its ruling on the matters covered as follows: 1. That the transfer of the workwear to its customer by the Applicant Company amounts to transfer of right to use goods; 2. That the services provided by the Applicant Company is composite supply under GST Laws; 3. That the principle supply of above mentioned composite supply is renting of workwear; 4. That in case locker facility is provided along with

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uestion 1 : 1. What is the classification of the activities/transactions carried out by the applicant company as mentioned in the statement of facts (Annexure-I). In particular, i) DO these activities/ transactions of renting of work wear qualify as transfer of right to use of goods by applicant company to its customers in terms of entry 5(f) of Schedule II of CGST Act, ii) Alternatively do these activities/ transactions qualify as transfer of right in goods in terms of Entry 1 (b) of Schedule II of CGST, Act? Entry 1 (b) of Schedule II of CGST Act, 2017 states that: Transfer (b) an transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of service. Entry 5(f) of Schedule II of CGST Act, 2017 states that (f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. M/s. Lindstorm Services India Pvt Ltd provide workwear on rent to their cu

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n the first place. The customers cannot sublet the workwear or use it for any other needs. Thus, this is not an absolute or un-conditional transfer of rights. Hence, this activity is more aptly categorized under Entry 5(f) of Schedule II of CGST Act, 2017 as this is transfer of the right to use the goods(workwear) for the said purpose (in this case) for a specified period (12 months or perpetuity) for a pre-determined consideration (weekly rent). Question 2: ii) What is the nature of the supply based on the facts and circumstances as mentioned in the statement of facts i.e. renting of work wear along with other services such as transportation, weekly washing etc. for a single consideration? Does this supply qualify as composite supply as per Section 2(30) of CGST Act? Alternatively does this supply constitute a mixed supply under Section 2(74) of CGST Act? Section 2(30) of the CGST Act., 2017 defines a Composite Supply as: Composite Supply means a supply made by a taxable person to a r

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ependent on any other. It shall not be a mixed supply if these items are supplied separately; The services provided by M/s. Lindstorm Services India Pvt Ltd. are as listed below: i. Renting of workwear ii. Wash, maintenance & repair iii. Transport of workwear including trolleys and transport of bags iv. Lockers for storage of workwear v. Modification of workwear as per specifications vi. Sale of logo/ badges/ nametags Replacement or reimbursement of old workwear against a redemption charge. From our records, it has also been observed that M/s. Lindstorm Services India Pvt Ltd provide services of Supply of Manpower (if need be) for the Management of lockers & workwear at the customer s premises. For a supply to be considered as a Composite Supply, as per the Taxation of Services, an Education Guide, / 2012 dated 20.06.2012, issued by Central Bureau of Excise and Customs, an illustrative list of indicators could be : Whether there is a single price or the customer pays the same a

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s not a standalone service and adds to enhance the quality of the former. Hence, the two services are naturally bundled. Applying the same ratio decided to the case of M/s. Lindstorm Services India Pvt Ltd, it is evident that Washing, Maintenance and Repair of workwear is a standalone service and it is independent of the service of renting of workwear. There are many industries which offer only the services of Washing, Maintenance and Repair of clothes. As perused from our records, M/s Lindstorm Services India Pvt Ltd has also provided only Washing Services in the past to one of their customers (namely Glaxo Smith Kline). Hence, it is evident that this bundling of services fails to meet the above two criteria to be classified as a Composite Supply as the services are not naturally bundled. On the other hand, since the supply are bundled services done under a single invoice, it qualifies as a Mixed Supply as defined under Section 2(74) of the CGST Act, 2017. Question 3: In the event the

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red and stated that she does not have any objection with respect to admission and made written submissions. The application was admitted and called for final hearing on 23.08.2018, Sh. Tarun Jain, Advocate along with Sh. Ankit Shah, applicant Ms. Anjana Varma and Sh. Saurabh Chhadwa appeared and made oral and written submissions. Jurisdictional Officer, Sh. Sadanand Patnaik Asst. Commissioner, Belapur-IV, Division appeared and stated that they have already made written submissions. 05. OBSERVATIONS We find that the applicant has raised questions as mentioned above on which advance ruling is sought. We now deal with the questions raised, as under:- Question 1. What is the classification of the activities/transactions carried out by the Applicant Company as mentioned in the statement of facts (Annexure-I). In particular; Do these activities/ transactions of renting of workwear qualify as transfer of right to use of goods (i.e. workwear) by the Applicant Company to its customers in terms

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lso mentions that in the event either applicant or the customer withdraw from the agreement, the workwear remains the Applicant s property. The facts of the present case are similar to the facts in the judgment of Hon. High Court of AP in case of M/s. G.S. Lamba & Sons Vs. State of Andhra Pradesh reported as 43 VST 323 (AP) = 2011 (1) TMI 1196 – ANDHRA PRADESH HIGH COURT wherein petitioners agreed to provide five dedicated fleet of transit mixers and these dedicated vehicles were to be painted in a particular style and colour. The court held that during the period of contract for any third party, the goods as visible in use would create an immediate impression that they belong to lessee and thus finally held that the petitioner has transferred the right to use goods to Grasim (the lessee). From the above terms of the contract, it is clear that for the contractual period, the ownership of the workwear rests with the applicant and only the right to use the workwear is intended to be

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the activities carried out by the applicant is renting of workwear, which we have declared as supply of services. Besides renting of workwear and as per the terms of the contract, ancillary activities such as transport of workwear, weekly cleaning, maintenance, repairs and finishing of workwear is carried out by the applicant. It is thus obvious that impugned transaction as envisaged by the contract consists of more than two taxable supplies of services. In view of this the applicant concludes that services provided by them such as renting of workwear and other ancillary services constitute composite supply as defined in section 2(30), which we reproduce as under: Section 2(30) of the CGST Act., 2017 defines a Composite Supply as: Composite Supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinar

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ined with provision of ancillary services such as transportation, weekly clearing, maintenance, repairs and finishing of the said workwear. Thus applicant satisfies one of the conditions that is essential character of Bundled Service of the composite supply. Applicant having satisfied one of the essential character of composite supply as mentioned above now examine whether these services are bundled in the ordinary course of business which is one of the essential character of supply. To answer this Question we have to refer to Object of the Agreement at para 2 of the agreement made between M/s. Nutromode and M/s. Lindstorm Services India Pvt Ltd. 2. Object of the Agreement We find that M/s. Drums Food International Pvt. Ltd. shall rent from M/s. Lindstorm Services India Pvt. Ltd. the workwear and Lindstorm engages in delivering, washing and servicing the workwear and taking care of the required replacement of the workwear in accordance with their purpose of use. Lindstorm owns the rent

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d not in the ordinary course of business but under the compulsion imposed by the applicant on the customer. Further we find that services such as washing, maintenance and transportation etc. are standalone services and are normally available separately. We agree with the jurisdictional officer that all so called ancillary services are independent of the service of renting of workwear and that there are many service providers who offer specific service such as washing, maintenance and repair of cloths. Applicant has also provided Washing Services in the past to one of their customer namely Glaxo Smith line which clearly supports the conclusion which we have arrived at above. In view of the above we find that the contention of the applicant that impugned transaction of supply constitute composite supply as defined u/s 2(30) of the GST Act does not sustain. As a corollary of above conclusion we now find whether the transaction of supply under reference is a Mixed Supply as defined under s

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ther we find that customer pays single price under single invoice for the package of services. We have already ruled out the possibility of the present transaction being a composite supply, and the fall out is that the transaction qualifies as a mixed supply as defined in section 2(74) of the GST Act. 06. In view of the deliberations as held hereinabove, we pass an order as under: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-43/2018-19/B-115 Mumbai, dt. 15.09.2018 For reasons as discussed in the body of the order, the questions are answered thus – Question 1. What is the classification of the activities transactions carried out by the Applicant Company as mentioned in the statement of facts (Annexure-I). In particular, Do these activities / transactions of renting of workwear qualify as transfer of right to use of goods (i.e. workwear) by the Applicant Company to its customers in terms of entry

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Goods and Services Tax – Clarification regarding processing of refund claims filed by UIN entities – TMI Updates – Highlights

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Goods and Services Tax – Modification of the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances. – TMI Updates – Highlights

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Goods and Services Tax – Started By: – venkataraman swaminathan – Dated:- 14-9-2018 Last Replied Date:- 14-9-2018 – Dear Sir We are a job worker doing job work for our customer X . Registered with GST and paying GST undder SAC code. Customer is giving all raw materials / components etc. and doiong machining / assembly and send back the FG to sutomer under DC .For our Labour charges we are paying GST under SAC Code. for the Raw materials /components given by our Principal/ ie. by our customer , we need to send WIP components to our s/c vendors for further processing like machining / plating / painting / HT etc..activity. and we send the components to our s/c vendor under our Delivery challan and the entire transactions are under SAP/ERP. In

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Goods and Services Tax – Started By: – Ravikumar Doddi – Dated:- 14-9-2018 Last Replied Date:- 14-9-2018 – Dear sir,Dealer is running bakery, he manufacture some of the items like, cakes, pastries, bread and like items and he will also trade biscuits and chocolates, cool drinks getting it from GST dealers , doing across the counter sales and partly service. Kindly clarify what is the rate of tax in composition. – Reply By SHIVKUMAR SHARMA – The Reply = You have to Pay GST 1%(CGST 0.5% & SGS

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 14-9-2018 – The year 2018 so far has seen revival of demand of Indian Made Foreign Liquor (IMFL) by 2-3 percent, which was in negative for last two years. The slow down during 2016-2018 was mainly due to adverse effect of demonetization in November, 2016 followed by highway sale ban by Supreme Court in March, 2017 and then GST w.e.f. 1st July, 2017. The impact of all these reasons has now been stabilized and business is returning to near normal now. On whether to include a alcoholic beverages and alcohol into GST ambit is still a big question mark. The GST Council, the supreme body to take decisions on GST under the Constitution, is expected to take first steps in this direction but that will happen only when all the states are on board. With opposition (political parties other than the ruling party at centre) still governing few States / Union Territories, consensus may not be possible as has been the decisions of the

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to be levied on the supply of ENA @18% GST in terms of Entry No. 25 of Schedule-III of the Notification No. 1/2017-State Tax (Rate), dated 30.06.2017 and 1/2017-CT (Rate) dated 28.06.2018. The relevant clarification reads as under: This is with reference to the issue raised on the captioned subject during the Video Conference held on 30.06.2018. This matter was discussed in the 20th meeting of GST Council on 05.08.17 wherein it was decided to obtain legal opinion of Attorney General of India. Attorney General of India vide reference no AGI 6/2017-Adv.C dt 03.12.18 has given following opinion on the issue: ENA typically contains 95% alcohol by volume and as such is not fit for human consumption. Under article 246A (1) read with 366(12A), GST cannot be levied on the supply of alcoholic liquor for human consumption . ENA that is used for manufacture of alcoholic liquor is not supply for the purpose of human consumption as it is not consumed directly, but goes through a process of manufact

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f GST net, leading to enhanced cost of production without any set off benefit of input taxes in the form of GST. While it may be technically correct to levy GST on ENA as it is not a potable liquor (meant for human consumption), yet it will bring in more distortions but of course, more revenue too to the exchequer. However, the VAT paid on the purchase of ENA can be used as a set-off on the VAT payable on sale of potable alcohol. But, if ENA is subject to the GST, input tax credit will no longer be available. While ENA is a major input for alco-beverage sector, it is also used in cosmetic, pharmaceutical and perfume formulations. There it would be allowed a set off and will therefore, be a welcome change. GST or no GST, be it on raw material and inputs or the output supply, alco-beverage sector is facing challenge on costing front which accrues because of GST. The only possible solution lies in two fold strategy -one, to remove GST on all major inputs and two, bring both inputs and out

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Goods and Services Tax – GST – By: – Sandeep Rawat – Dated:- 14-9-2018 Last Replied Date:- 15-9-2018 – GST late fee waiver scheme launched and GSTR-1 filing date extended* It has been observed that the number of taxpayers who have filed FORM GSTR-3B is substantially higher than the number of taxpayers who have furnished FORM GSTR-1. ✔Non-furnishing of FORM GSTR-1 is liable to late fee and penalty as per the provisions of the GST law. ✔In order to encourage taxpayers to furnish FORM GSTR-1, a one-time scheme to waive off late fee payable for delayed furnishing of FORM GSTR-1 for the period from July, 2017 to September, 2018 till 31.10.2018 has been launched. ✔In this regard, the due date for furnishing FORM GSTR-1 for t

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ataka) and Mahe (Puducherry), the due date for furnishing FORM GSTR-1 for the quarter July, 2018 to September, 2018 would continue to remain as 15th November, 2018 as notified vide notification No. 38/2018-Central Tax dated 24th August, 2018. ✔ Further, for those taxpayers who will now be migrating to GST as per the procedure specified in notification No. 31/2018-Central Tax, dated 06.08.2018, the last date for furnishing the details of outward supplies of goods or services or both in FORM GSTR-1 and for filing the return in FORM GSTR-3B for the months of July, 2017 to November, 2018 has been extended till 31.12.2018. ✔ Notification Nos. 45, 46 and 47/2018 – Central Tax dated 10th September, 2018 have thus been issued for exte

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GST – GSTR – 09C – 2[FORM GSTR-9C See rule 80(3) PART – A – Reconciliation Statement Pt. I Basic Details 1 Financial Year 2 GSTIN 3A Legal Name < Auto> 3B Trade Name (if any) 4 Are you liable to audit under any Act? << Please specify >> (Amount in Rs.in all tables) Pt. II Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9) 5 Reconciliation of Gross Turnover A Turnover (including exports) as per audited financial statements for the State / UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) B Unbilled revenue at the beginning of Financial Year (+) C Unadjusted advances at the end of the Financial Year (+) D Deemed Supply under Schedule I (+) E Credit Notes issued after the end of the financial year but reflected in the annual return (-) F Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible und

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supplies, No-Supply turnover C D E F Zero rated supplies without payment of tax Supplies on which tax is to be paid by the recipient on reverse charge basis Taxable turnover as per adjustments above (A-B-C-D) Taxable turnover as per liability declared in Annual Return (GSTR9) G Unreconciled taxable turnover (F-E) AT 2 8 Reasons for Un – Reconciled difference in taxable turnover A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> Pt. III Reconciliation of tax paid 9 Reconciliation of rate wise liability and amount payable thereon Tax payable Description Taxable Value Central tax State tax / UT tax Integrated Tax Cess, if applicable 1 2 3 4 5 6 A 5% B 5% (RC) C 12% D 12% (RC) E 18% F 18% (RC) G 28% H 28% (RC) I 3% J 0.25% K 0.10% L Interest M Late Fee N Penalty O Others P Total amount to be paid as per tables above Q Total amount paid as declared in Annual Return (GSTR 9) R Un- reconciled payment of amount (PT1) 10 Reasons for un-reconci

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1 <> B Reason 2 <> C Reason 3 <> 14 Reconciliation of ITC declared in Annual Return (GSTR9) with ITC availed on expenses as per audited Annual Financial Statement or books of account Description Value Amount of Total ITC Amount of eligible ITC availed 1 2 3 4 A Purchases B Freight / Carriage C Power and Fuel D Imported goods (Including received from SEZs) E Rent and Insurance F Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples G Royalties H Employees' Cost (Salaries, wages, Bonus etc.) I Conveyance charges J Bank Charges K Entertainment charges L Stationery Expenses (including postage etc.) M Repair and Maintenance N Other Miscellaneous expenses O Capital goods P Any other expense 1 Q Any other expense 2 R Total amount of eligible ITC availed <> S ITC claimed in Annual Return (GSTR9) T Un-reconciled ITC (ITC 2) 15 Reasons for un – reconciled difference in ITC A Reason 1 <> B Reason 2 <> C Reason 3 <> 1

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……………… Date: …………… Full address ……………………… Verification of registered person: I hereby solemnly affirm and declare that I am uploading the reconciliation statement in FORM GSTR-9C prepared and duly signed by the Auditor and nothing has been tampered or altered by me in the statement. I am also uploading other statements, as applicable, including financial statement, profit and loss account and balance sheet etc. Signature Place: Date: Name of Authorized Signatory Designation/status Instructions: – 1. Terms used: (a) GSTIN: Goods and Services Tax Identification Number 2. It is mandatory to file all your FORM GSTR-1, FORM GSTR-3B and FORM GSTR -9 for the FY 2017-18 before filing this return. The details for the period between July 2017 to March 2018 are to be provided in this statement for the financial year 2017-18. The reconciliation statement is to

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ies having presence over multiple States. 5B Unbilled revenue which was recorded in the books of accounts on the basis of accrual system of accounting in the last financial year and was carried forward to the current financial year shall be declared here. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here. (For example, if rupees Ten Crores of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on rupees Four Crores of such revenue, then value of rupees Four Crores rupees shall be declared here) 5C Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall be declared here. 5D Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is already part of the turnover in the aud

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s which have been accounted for in the audited Annual Financial Statement but were not admissible under Section 34 of the CGST Act shall be declared here. 5K Aggregate value of all goods supplied by SEZs to DTA units for which the DTA units have filed bill of entry shall be declared here. 5L There may be cases where registered persons might have opted out of the composition scheme during the current financial year. Their turnover as per the audited Annual Financial Statement would include turnover both as composition taxpayer as well as normal taxpayer. Therefore, the turnover for which GST was paid under the composition scheme shall be declared here. 5M There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 of the CGST Act, 2017 and rules thereunder. Therefore, any difference between the turnover reported in the Annual Return (GSTR 9) and turnover reported in the audited Annual Financial Statement due to difference in valua

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ed in Table 5P above would be auto-populated here. 7B Value of exempted, nil rated, non-GST and no-supply turnover shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7C Value of zero rated supplies (including supplies to SEZs) on which tax is not paid shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7D Value of reverse charge supplies on which tax is to be paid by the recipient shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7E The taxable turnover is derived as the difference between the annual turnover after adjustments declared in Table 7A above and the sum of all supplies (exempted, non-GST, reverse charge etc.) declared in Table 7B, 7C and 7D above. 7F Taxable turnover as declared in Table (4N – 4G) + (10-11) of the Annual Return (GSTR9) shall be declared here. 8 Reasons for non-reconciliation between adjusted annual taxab

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10 Reasons for non-reconciliation between payable / liability declared in Table 9P above and the amount payable in Table 9Q shall be specified here. 11 Any amount which is payable due to reasons specified under Table 6, 8 and 10 above shall be declared here. 6. Part IV consists of reconciliation of Input Tax Credit (ITC). The instructions to fill Part IV are as under:- Table No. Instructions 12A ITC availed (after reversals) as per the audited Annual Financial Statement shall be declared here. There may be cases where multiple GSTINs (State-wise) registrations exist on the same PAN. This is common for persons / entities with presence over multiple States. Such persons / entities, will have to internally derive their ITC for each individual GSTIN and declare the same here. It may be noted that reference to audited Annual Financial Statement includes reference to books of accounts in case of persons / entities having presence over multiple States. 12B Any ITC which was booked in the aud

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ed here. 14 This table is for reconciliation of ITC declared in the Annual Return (GSTR9) against the expenses booked in the audited Annual Financial Statement or books of account. The various sub-heads specified under this table are general expenses in the audited Annual Financial Statement or books of account on which ITC may or may not be available. Further, this is only an indicative list of heads under which expenses are generally booked. Taxpayers may add or delete any of these heads but all heads of expenses on which GST has been paid / was payable are to be declared here. 14R Total ITC declared in Table 14A to 14Q above shall be auto populated here. 14S Net ITC availed as declared in the Annual Return (GSTR9) shall be declared here. Table 7J of the Annual Return (GSTR9) may be used for filing this Table. 15 Reasons for non-reconciliation between ITC availed on the various expenses declared in Table 14R and ITC declared in Table 14S shall be specified here. 16 Any amount which i

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rtification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by the person who had conducted the audit: * I/we have examined the- (a) balance sheet as on ……… (b) the *profit and loss account/income and expenditure account for the period beginning from ………..…to ending on ……., and (c) the cash flow statement for the period beginning from ……..…to ending on ………, -attached herewith, of M/s …………… (Name), …………………….………… (Address), ..…………………(GSTIN). 2. Based on our audit I/we report that the said registered person- *has maintained the books of accounts, records and documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder *has not maintained th

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oks. (C) I/we certify that the balance sheet, the *profit and loss/income and expenditure account and the cash flow Statement are *in agreement/not in agreement with the books of account maintained at the Principal place of business at ……………………and ** ……………………additional place of business within the State. 4. The documents required to be furnished under section 35 (5) of the CGST Act/SGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act/SGST Act is annexed herewith in Form No. GSTR-9C. 5. In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the particulars given in the said Form No.GSTR-9C are true and correct subject to following observations/qualifications, if any: (a) ……………………………………&

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Name of the signatory ………………… Membership No……………… Date: …………… Full address ……………………… II. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by a person other than the person who had conducted the audit of the accounts: *I/we report that the audit of the books of accounts and the financial statements of M/s. ………………..…………………. (Name and address of the assessee with GSTIN) was conducted by M/s. …………………………………………..………. (full name and address of auditor along with status), bearing membership number in pursuance of the provisions of the …………&

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ents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3. 3. The documents required to be furnished under section 35 (5) of the CGST Act/SGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act/SGST Act is annexed herewith in Form No.GSTR-9C. 4. In *my/our opinion and to the best of *my/our information and according to examination of books of account including other relevant documents and explanations given to *me/us, the particulars given in the said Form No.9C are true and correct subject to the following observations/qualifications, if any: (a) …………………………….…………………………….……………………… (b) …………………………&h

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. Substituted vide Notification No. 74/2018 – Central Tax dated 31-12-2018 before it was read as 1[FORM GSTR-9C See rule 80(3) PART – A – Reconciliation Statement Pt. I Basic Details 1 Financial Year 2 GSTIN 3A Legal Name < Auto > 3B Trade Name (if any) < Auto > 4 Are you liable to audit under any Act? << Please specify >> (Amount in ₹ in all tables) Pt. II Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9) 5 Reconciliation of Gross Turnover A Turnover (including exports) as per audited financial statements for the State / UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) B Unbilled revenue at the beginning of Financial Year (+) C Unadjusted advances at the end of the Financial Year (+) D Deemed Supply under Schedule I (+) E Credit Notes issued after the end of the financial year but reflected in the annual return (+) F T

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n 3 << Text >> 7 Reconciliation of Taxable Turnover A Annual turnover after adjustments (from 5P above) < Auto > B Value of Exempted, Nil Rated, Non-GST supplies, No-Supply turnover C D E F Zero rated supplies without payment of tax Supplies on which tax is to be paid by the recipient on reverse charge basis Taxable turnover as per adjustments above (A-B-C-D) < Auto > Taxable turnover as per liability declared in Annual Return (GSTR9) G Unreconciled taxable turnover (F-E) AT 2 8 Reasons for Un – Reconciled difference in taxable turnover A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> Pt. III Reconciliation of tax paid 9 Reconciliation of rate wise liability and amount payable thereon Tax payable Description Taxable Value Central tax State tax / UT tax Integrated Tax Cess, if applicabl e 1 2 3 4 5 6 A B 5% 5% (RC) C D E F G H 12% 12% (RC) 18% 18% (RC) 28% 28% (RC) I J K L M N 3% 0.25% 0.10% Interest Late Fee P

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Year (+) C ITC booked in current Financial Year to be claimed in subsequent Financial Years (-) D ITC availed as per audited financial statements or books of account < Auto > E ITC claimed in Annual Return (GSTR9) F Un-reconciled ITC ITC 1 13 Reasons for un-reconciled difference in ITC A B C Reason 1 << Text >> Reason 2 << Text >> Reason 3 << Text >> 14 Reconciliation of ITC declared in Annual Return (GSTR9) with ITC availed on expenses as per audited Annual Financial Statement or books of account Description Value Amount of Total ITC Amount of eligible ITC availed 1 2 3 4 A B C D E F G Purchases Freight / Carriage Power and Fuel Imported goods (Including received from SEZs) Rent and Insurance Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples Royalties H I J K L M Employees' Cost (Salaries, wages, Bonus etc.) Conveyance charges Bank Charges Entertainment charges Stationery Expenses (including postage e

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pecify) Verification: I hereby solemnly affirm and declare that the information given herein above is true and correct to the best of my knowledge and belief and nothing has been concealed there from. **(Signature and stamp/Seal of the Auditor) Place: …………… Name of the signatory ………………… Membership No……………… Date: …………… Full address ……………………… Instructions: – 1. Terms used: (a) GSTIN: Goods and Services Tax Identification Number 2. The details for the period between July 2017 to March 2018 are to be provided in this statement for the financial year 2017-18. The reconciliation statement is to be filed for every GSTIN separately. 3. The reference to current financial year in this statement is the financial year for which the reconciliation statement is being filed for. 4

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was carried forward to the current financial year shall be declared here. In other words, when GST is payable during the financial year on such revenue (which was recognized earlier), the value of such revenue shall be declared here. (For example, if rupees Ten Crores of unbilled revenue existed for the financial year 2016-17, and during the current financial year, GST was paid on rupees Four Crores of such revenue, then value of rupees Four Crores rupees shall be declared here) 5C Value of all advances for which GST has been paid but the same has not been recognized as revenue in the audited Annual Financial Statement shall be declared here. 5D Aggregate value of deemed supplies under Schedule I of the CGST Act, 2017 shall be declared here. Any deemed supply which is already part of the turnover in the audited Annual Financial Statement is not required to be included here. 5E Aggregate value of credit notes which were issued after 31st of March for any supply accounted in the current

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ods supplied by SEZs to DTA units for which the DTA units have filed bill of entry shall be declared here. 5L There may be cases where registered persons might have opted out of the composition scheme during the current financial year. Their turnover as per the audited Annual Financial Statement would include turnover both as composition taxpayer as well as normal taxpayer. Therefore, the turnover for which GST was paid under the composition scheme shall be declared here. 5M There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 of the CGST Act, 2017 and rules thereunder. Therefore, any difference between the turnover reported in the Annual Return (GSTR 9) and turnover reported in the audited Annual Financial Statement due to difference in valuation of supplies shall be declared here. 5N Any difference between the turnover reported in the Annual Return (GSTR9) and turnover reported in the audited Annual Financial Statement d

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debit notes and amendments if any. 7C Value of zero rated supplies (including supplies to SEZs) on which tax is not paid shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7D Value of reverse charge supplies on which tax is to be paid by the recipient shall be declared here. This shall be reported net of credit notes, debit notes and amendments if any. 7E The taxable turnover is derived as the difference between the annual turnover after adjustments declared in Table 7A above and the sum of all supplies (exempted, non-GST, reverse charge etc.) declared in Table 7B, 7C and 7D above. 7F Taxable turnover as declared in Table 4N of the Annual Return (GSTR9) shall be declared here. 8 Reasons for non-reconciliation between adjusted annual taxable turnover as derived from Table 7E above and the taxable turnover declared in Table 7F shall be specified here. 5. Part III consists of reconciliation of the tax payable as per declaration in the re

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cified under Table 6, 8 and 10 above shall be declared here. 6. Part IV consists of reconciliation of Input Tax Credit (ITC). The instructions to fill Part IV are as under:- Table No. Instructions 12A ITC availed (after reversals) as per the audited Annual Financial Statement shall be declared here. There may be cases where multiple GSTINs (Statewise) registrations exist on the same PAN. This is common for persons / entities with presence over multiple States. Such persons / entities, will have to internally derive their ITC for each individual GSTIN and declare the same here. It may be noted that reference to audited Annual Financial Statement includes reference to books of accounts in case of persons / entities having presence over multiple States. 12B Any ITC which was booked in the audited Annual Financial Statement of earlier financial year(s)but availed in the ITC ledger in the financial yearfor which the reconciliation statement is being filed for shall be declared here. This sh

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specified under this table are general expenses in the audited Annual Financial Statement or books of account on which ITC may or may not be available. Further, this is only an indicative list of heads under which expenses are generally booked. Taxpayers may add or delete any of these heads but all heads of expenses on which GST has been paid / was payable are to be declared here. 14R Total ITC declared in Table 14A to 14Q above shall be auto populated here. 14S Net ITC availed as declared in the Annual Return (GSTR9) shall be declared here. Table 7J of the Annual Return (GSTR9) may be used for filing this Table. 15 Reasons for non-reconciliation between ITC availed on the various expenses declared in Table 14R and ITC declared in Table 14S shall be specified here. 16 Any amount which is payable due to reasons specified in Table 13 and 15 above shall be declared here. 7. Part V consists of the auditor s recommendation on the additional liability to be discharged by the taxpayer due to

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r the period beginning from ……..…to ending on ………, – attached herewith, of M/s …………… (Name), …………………….………… (Address), ..…………………(GSTIN). 2. Based on our audit I/we report that the said registered person- *has maintained the books of accounts, records and documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder *has not maintained the following accounts/records/documents as required by the IGST/CGST/<<>>GST Act, 2017 and the rules/notifications made/issued thereunder: 1. 2. 3. 3. (a) *I/we report the following observations/ comments / discrepancies / inconsistencies; if any: ……………………………………. ……&hell

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iness within the State. 4. The documents required to be furnished under section 35 (5) of the CGST Act and Reconciliation Statement required to be furnished under section 44(2) of the CGST Act is annexed herewith in Form No. GSTR-9C. 5. In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the particulars given in the said Form No.GSTR-9C are true and correct subject to following observations/qualifications, if any: (a) …………………………………………………………………………………… (b) …………………………………………………………………………………… (c) &he

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ed the audit of the accounts: *I/we report that the audit of the books of accounts and the financial statements of M/s. ………………..…………………. (Name and address of the assessee with GSTIN) was conducted by M/s. …………………………………………..………. (full name and address of auditor along with status), bearing membership number in pursuance of the provisions of the …………………………….Act, and *I/we annex hereto a copy of their audit report dated ……………………………. along with a copy of each of :- (a) balance sheet as on ……… (b) the *profit and loss account/income and expenditure account for the period beginning from ………..&h

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examination of books of account including other relevant documents and explanations given to *me/us, the particulars given in the said Form No.9C are true and correct subject to the following observations/qualifications, if any: (a) …………………………….…………………………….……………………… (b) …………………………….…………………………….……………………… (c) …………………………….…………………………….……………………… &helli

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