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Query (Issue) Started By: – satbir singhwahi Dated:- 5-9-2018 Last Reply Date:- 5-9-2018 Goods and Services Tax – GST
Got 1 Reply
GST
Two partnership firms having same common partners. Both firms receiving commission from abroad as intermediary.
Firm A has turnover of 40 lakhs , so paying gst.
Firm B has turnover of 18 lakhs, so not paying gst.
KIndly guide .
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
Firm B is not required to registration.
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Author: admin_gst
Annual Return (For Composition Taxpayer)
Annual Return (For Composition Taxpayer)
GSTR – 09A
GST
2[FORM GSTR – 9A
[See rule 80]
Annual Return (For Composition Taxpayer)
Pt. I
Basic Details
1
Financial Year
2
GSTIN
3A
Legal Name
3B
Trade Name (if any)
4
Period of composition scheme during the year (From – To -)
5
Aggregate Turnover of Previous Financial Year
(Amount in Rs.in all tables)
Pt. II
Details of outward and inward supplies made during the financial year
Description
Turnover
Rate of Tax
Centra l Tax
State / UT Tax
Integrate d tax
Cess
1
2
3
4
5
6
7
6
Details of Outward supplies made during the financial year
A
Taxable
B
Exempted, Nil-rated
C
Total
7
Details of inward supplies on which tax is payable on reverse charge basis (net of debit/credit notes) for the financial year
Description
Taxable Value
Central Tax
State Tax / UT Tax
Integrate d Tax
Cess
1
2
3
4
5
6
A
Inward supplies liable to reverse charge received from registered persons
B
Inward s
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tward) 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
Integrate d Tax
Cess
Interest
Penalty
Late Fee / Other s
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 of credit reversed or availed
Description
Central Tax
State Tax / UT Tax
Integrated Tax
Cess
1
2
3
4
5
A
Credit reversed on opting in the composition scheme (-)
B
Credit availed on opting out of the composition scheme (+
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ial year is the turnover 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.
4. 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. T
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Y 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
10,11,12,13 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.
6. 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 de
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The details furnished in FORM ITC-03 may be used for 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.”;
7. Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in this form, through FORM DRC-03. Taxpayers shall select “Annual Return” in the drop down provided in FORM DRC-03. It may be noted that such liability shall be paid through electronic cash ledger only.]
********
Notes
1. Inserted vide Notification No. 39/2018 – Central Tax dated 04-09-2018
2. Substituted vide Notification No. 74/2018 – Central Tax dated 31-12-2018 before it was read as
“1[FORM GSTR-9A
(See rule 80)
Annual Return (For Composition Taxpayer)
Pt. I
Basic Details
1
Financial Year
2
GSTIN
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C
Import of services
D
Net Tax Payable on (A), (B) and (C) above
8
Details of other inward supplies as declared in returns filed during the financial year
A
Inward supplies from registered persons (other than 7A above)
B
Import of Goods
Pt. III
Details of tax paid as declared in returns filed during the financial year
9
Description
Total tax payable
Paid
1
2
3
Integrated Tax
Central Tax
State/UT Tax
Cess
Interest
Late fee
Penalty
Pt. IV
Particulars of the transactions for the previous FY declared in returns of April to September of current FY or upto date of filing of annual return of previous FY whichever 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 (
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aid
Description
Payable
Paid
1
2
3
A
Central Tax
B
State Tax
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 and in case of any reduction in output tax liability the benefit thereof has been/will be passed on to the recipient of supply.
Signature
Place
Name of Authorised Signatory
Date
Designation / Status
Instructions: –
1. The details for the period between July 2017 to March 2018 shall be provided in this return.
2. Part I consists of basic details of taxpayer. The instructions to fill Part I are as follows :
Table No.
Instructions
5
Aggregate turnover for the previous financial year is the turnover 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
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e basis shall be declared here. Table 4C, Table 5 and Table 8A of FORM GSTR-4 may be used for filling up these details.
7C
Aggregate value of all services imported during the financial year shall be declared here. Table 4D and Table 5 of FORM GSTR-4 may be used for filling up these details.
8A
Aggregate value of all inward supplies received from registered persons on which tax is payable by the supplier shall be declared here. Table 4A and Table 5 of FORM GSTR-4 may be used for filling up these details.
8B
Aggregate value of all goods imported during the financial year shall be declared here.
4. Part IV consists of the details of amendments made for the supplies of the previous financial year in the returns of April to September of the 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
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egate 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 and 15G
Aggregate value of demands of taxes for which an order confirming the demand has been issued by the adjudicating authority has been issued shall be declared here. Aggregate value of taxes paid out of the total value of confirmed demand in 15E above shall be declared here. Aggregate value of demands pending recovery out of 15E above shall be declared here.
16A
Aggregate value of all credit reversed when a person opts to pay tax under the composition scheme shall be declared here. The details furnished in FORM ITC-03 may be used for 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 i
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Annual Return
Annual Return
GSTR – 09
GST
2[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 made during the financial year
(Amount in Rs. 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 made during the financial year on which tax is payable
A
Supplies made to un-registered persons (B2C)
B
Supplies made to registered persons (B2B)
C
Zero rated supply (Export) on payment of tax (except supplies to SEZs)
D
Supply to SEZs on payment of tax
E
Deemed Exports
F
Advances on w
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p;
N
Supplies and advances on which tax is to be paid (H + M) above
5
Details of Outward supplies made during the financial year on which tax is not payable
A
Zero rated supply (Export) without payment of tax
B
Supply to SEZs without payment of tax
C
Supplies on which tax is to be paid by the recipient on reverse charge basis
121[C1
Supplies on which tax is to be paid by ecommerce operators
as per section 9(5) [Supplier to report]
]
D
Exempted
E
Nil Rated
F
Non-GST supply (includes ‗no supply')
G
Sub-total (A to F above)
H
Credit Notes issued in respect of transactions specified in A to F above (-
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year availed in the financial year (which is included in 6A above) other than ITC reclaimed under rule 37 and rule 37A
A2
Net ITC of the financial year “(A-A1)”
]
B
Inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs)
Inputs
Capital Goods
Input Services
C
Inward supplies received from unregistered persons liable to reverse charge (other than B above) on which tax is paid & ITC availed
Inputs
Capital Goods
Input Services
D
Inward supplies received from registered persons liable to reverse charge (other than B above) on which tax is paid and ITC availed
Inputs
Capital Goods
&nb
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ve)
7
Details of ITC Reversed and Ineligible ITC for the financial year
A
As per Rule 37
149[A1
As per Rule 37A
A2
As per rule 38
]
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 (Sum of A to H above)
J
Net ITC Available for Utilization (6O – 7I)
8
Other ITC related information
144[A
ITC as per GSTR-2B (table 3
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J
ITC available but not availed on import of goods (Equal to I)
K
Total ITC to be lapsed in current financial year (E + F + J)
Pt. IV
Details of tax paid as declared in returns filed during the financial year
154[9
Description
Tax Payable
Paid through cash
Paid through ITC
Total Tax
Paid
Difference between
Tax payable and paid
Central
Tax
State Tax
/ UT Tax
Integrated
Tax
Cess
1
2
3
4
5
6
7
8 =
3+4+5+6+7
2-8
Integrated Tax
Central Tax
State/UT Tax
Cess
Int
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;financial year
14
Differential tax paid on account of declaration in 10 & 11 above
Description
Payable
Paid
Difference
1
2
3
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
Intere st
Penalty
Late Fee / Other s
1
2
3
4
5
A
Total Refund claimed
B
Total Refund sanction ed
C
Total Refund Rejected
D
Total Refund Pending
E
Total demand of taxes
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18
HSN Wise Summary of Inward supplies
HSN Cod e
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
19
Late fee payable and paid
Description
Payable
Paid
1
2
3
A
Central Tax
B
State Tax
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 and in case of any reduction in output tax liability the benefit thereof has been/will be passed on to the recipient of supply.
Place
Signatory
Date
Signature
Name of Authorised
Designation / Status
Instructions: –
156[1. Terms used:
(a) GSTIN: Goods and Services Tax Identifica
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ared in this part. 6[It may be noted that additional liability for the FY 2017-18 19[or FY 2018-19] 56[or FY 2019-20] 72[or FY 2020-21] 86[or FY 2021-22] 105[or FY 2022-23] 123[or FY 2023-24] 159[or FY 2024-25] not declared in FORM GSTR-1 and FORM GSTR-3B may be declared in this return. However, taxpayers cannot claim input tax credit 20[*****] through this return.]
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-1 124[as amended by FORM GSTR-1A, if any] may be used for filling up these details.
4B
Aggregate value of supplies made to registered persons (including supplies made
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se details.
4F
Details of all unadjusted advances i.e. advance has been received and tax has been paid but invoice has not been issued in the current year shall be declared here. Table 11A of FORM GSTR-1 124[as amended by FORM GSTR-1A, if any] may be used for filling up these details.
4G
Aggregate value of all inward supplies (including advances and net of credit and debit notes) on which tax is to be paid by the recipient (i.e.by the 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.
125[4G1
Aggregate values of all the supplies (net of amendments) on which tax is to be paid by the ecommerce operators under section 9(5) is to be reported by e-commerce operator. Table 15 and 15A of FORM GSTR-1 may be re
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ty in reporting such details separately in this Table.]
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 and Table 9C of FORM GSTR-1 124[as amended by FORM GSTR-1A, if any] may be used for filling up these details. 23[For 57[FY 2017-18, 2018-19 73[, 2019-20 and 2020-21]], the registered person shall have an option to fill Table 4B to Table 4E net of amendments in case there is any difficulty in reporting such details separately in this table.]
5A
Aggregate value of exports (except supplies to SEZs) on which tax has not been paid shall be declared here. Table 6A of FORM GSTR-1 124[as amended by FORM GSTR-1A, if any] may be used for filling up these details.
5B
Aggregate value of supplies to SEZs on which tax has not been paid shall be declared here. Table 6B of GSTR-1 may be used for filling up these details
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ither separately report his supplies as exempted, nil rated and Non-GST supply or report consolidated information for all these three heads in the “exempted” row only.]
87[For FY 2021-22, the registered person shall report Non-GST supply (5F) separately and shall have an option to either separately report his supplies as exempted and nil rated supply or report consolidated information for these two heads in the “exempted” row only.]
106[For FY 2022-23, the registered person shall report Non-GST supply (5F) separately and shall have an option to either separately report his supplies as exempted and nil rated supply or report consolidated information for these two heads in the “exempted” row only.]
127[For FY 2023-24 160[and FY 2024-25,] the registered person shall report Non-GST supply (5F) separately and shall have an option to either separately report his supplies as exempted and nil rated supply or report consolidated information for these two heads in the “exempted” row only
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there is any difficulty in reporting such details separately in this Table.]
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-1 124[as amended by FORM GSTR-1A, if any] may be used for filling up these details. 27[For57[FY 2017-18, 2018-19 88[2019-20, 107[2020-21, 128[2021-22, 163[2022-23, 2023-24 and 2024-25,]]]] the registered person shall have an option to fill Table 5A to Table 5F net of amendments in case there is any difficulty in reporting such details separately in this Table.]
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
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nbsp;in any of the preceding financial year but reclaimed during the financial year for which this return is being filed, shall not be reported here as this will be reported in the Table 6H below.
Also, if any ITC which was claimed and reversed (other than due to rule 37 or rule 37A) in preceding financial year but reclaimed during the financial year for which this return is being filed, shall be reported here and this will not be reported in the Table 6H below.]
6B
Aggregate value of input tax credit availed on all inward supplies except those on which tax is payable on reverse charge basis but includes supply of services received from SEZs 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)(5) of FORM GSTR-3B may be used for filling up these details. This shall not include ITC which was availed, reversed and then reclaimed in the ITC ledger. This is to be declared separately under 6(H
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of services) 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.
29[For FY 2017-18 and 2018-19, the registered person shall have an option to either report the breakup of input tax credit as inputs, capital goods and input services or report the entire input tax credit under the “inputs” row only. 59[130[FY 2019-20, 2020-21, 2021-22, 168[2022-23, 2023-24 and 2024-25,]] the registered person shall report the breakup of input tax credit as capital goods and have an option to either report the breakup of the remaining amount as inputs and input services or report the entire remaining amount under the “inputs” row only.]
For 60[FY 2017-18, 2018-19 76[, 2019-20 and 2020-21]], the registered person shall have an option to either report Table 6C and Table 6D separately or report th
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60[FY 2017-18, 2018-19 and 76[, 2019-20 and 2020-21]], the registered person shall have an option to either report Table 6C and Table 6D separately or report the consolidated details of Table 6C and 6D in Table 6D only.]
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. 30[For FY 2017-18 and 2018-19, the registered person shall have an option to either report the breakup of input tax credit as inputs and capital goods or report the entire input tax credit under the “inputs” row only.]
61[For 130[FY 2019-20, 2020-21, 2021-22, 2022-23 and 2023-24], the registered person shall report the breakup of input tax credit as capital goods and have an option to either report the breakup of the remaining amount as inputs and input services or re
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ch was claimed and reversed (due to rule 37 or rule 37A) in any of the preceding financial year but reclaimed during the financial year for which this return is being filed, shall be reported here.
Also, if any ITC which was claimed and reversed (other than rule 37 or rule 37A) in preceding financial year but reclaimed during the financial year for which this return is being filed, shall not be reported here as it is to be reported in the Table 6A1 above.]
6J
The difference between the total amount of input tax credit availed through FORM GSTR-3B and input tax credit declared in row B to H shall be declared here. Ideally, this amount should be zero. 171[However, for FY 2024-25 onwards, the difference between the total amount of net ITC of the financial year availed through FORM GSTR-3B as per Table 6A2 and input tax credit declared in row B to H shall be auto populated here. Ideally, this amount should be zero.]
6K
Details of transition credit received in
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of FORM GSTR-3B may be used for filling up these details. Any ITC reversed through FORM ITC -03 or any other reversal not specified in any row above shall be declared in 7H. For FY 2017-18, 2018-19, 2019-20, 202021, 2021-22, 2022-23 and 2023-24, the registered person shall have an option to either fill his information on reversals separately in Table 7A to 7E or report the entire amount of reversal under Table 7H only.]
8A
The total credit available for inwards supplies (other than imports and inwards supplies liable to reverse charge but includes services received from SEZs 132[and supplies received from E-commerce operators]) pertaining to 32[the financial year for which the return is being for] 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 tax credit that has been declared by the corresponding suppliers 133[including e-commerce operators] in their FORM GSTR-1 33[For FY 2017-18,] 7[It may be note
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be auto-populated here. 35[For FY 2017-18 and 2018-19, the registered person shall have an option to upload the details for the entries in Table 8A to 8D duly signed, in PDF format in FORM GSTR-9C (without the CA certification).] 174[However, for FY 2024-25 onwards, the input tax credit as declared in Table 6B shall be auto-populated here.]
8C
64[Aggregate value of input tax credit availed on all inward supplies (except those on which tax is payable on reverse charge basis but includes supply of services received from SEZs) received during the financial year for which the annual return is being filed for but credit on which was availed in the next financial year within the period specified under Section 16(4) of the CGST Act, 2017.]
8D
Aggregate value of the input tax credit which was available in FORM GSTR-2A (table 3 & 5 only) but not availed in FORM GSTR-3B returns shall be computed based on values of 8A, 8B and 8C. However, there may be circumstances where the credit availed i
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l lapse for the current financial year shall be computed in this row.
6. 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.
7. 40[For FY 2017-18,] Part V consists of particulars of transactions for the previous financial year but paid in the FORM GSTR-3B of 9[between April 2018 to March 2019]. 41[For FY 2018-19, Part V consists of particulars of transactions for the previous financial year but paid in the FORM GSTR-3B between April 2019 to September 2019.] 65[For FY 2019-20, Part V consists of particulars of transactions for the previous financial year but paid in the FORM GSTR-3B between April 2020 to September 2020.] 79[For FY 2020-21, Part V consists of particulars of transactions for the previous financial year but paid in the FORM GSTR-3B between April 2021 to September 2021.] 91[For FY 2021-22, Part V consists of particulars of transactions for the previous
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us financial year but such amendments were furnished in Table 9A, Table 9B and Table 9C of FORM GSTR-1 of April 10[2018 to March 2019] shall be declared here. 43[For FY 2018-19, 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 9A, Table 9B and Table 9C of FORM GSTR-1 of April 2019 to September 2019 shall be declared here.]
66[For FY 2019-20, 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 9A, Table 9B and Table 9C of FORM GSTR-1 of April 2020 to September 2020 shall be declared here.]
80[For FY 2020-21, 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 9A, Table 9B and Table 9C of FORM GSTR-1 of April 2021 to September 2021 shall be declared
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Table 10, details of supplies or tax increased through invoices or debit note or upward amendment of the same pertaining to the financial year but furnished in FORM GSTR-1 or as amended in FORM GSTR-1A or furnished through invoice furnishing facility of April to October of the next financial year, filed upto 30th November of next financial year shall be declared here.
From FY 2024-25 onwards, for Table 11, details of supplies or tax reduced through invoices or credit note pertaining to the financial year but furnished in FORM GSTR-1 or as amended in FORM GSTR-1A or furnished through invoice furnishing facility of April to October of the next financial year, filed upto 30th November of next financial year shall be declared here.]
12
44[For FY 2017-18,] Aggregate value of reversal of ITC which was availed in the previous financial year but reversed in returns filed for the months of April 11[2018 to March 2019] shall be declared here. Table 4(B) of FORM GSTR-3B may be used for f
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12[For FY 2022-23, aggregate value of reversal of ITC which was availed in the previous financial year but reversed in returns filed for the months of April, 2023 to October, 2023 filed upto 30th November, 2023 shall be declared here. Table 4(B) of FORM GSTR-3B may be used for filling up these details. 137[For FY 2023-24, aggregate value of reversal of ITC which was availed in the previous financial year but reversed in returns filed for the months of April, 2024 to October, 2024 filed upto 30th November, 2024 shall be declared here. Table 4(B) of FORM GSTR-3B may be used for filling up these details.]] 45[For FY 2018-19, Aggregate value of reversal of ITC which was availed in the previous financial year but reversed in returns filed for the months of April 2019 to September 2019 shall be declared here. Table 4(B) of FORM GSTR-3B may be used for filling up these details. For 68[FY 2017-18, 82[2018-19, 94[2019-20, 113[2020-21, 138[2021-22, 2022-23 and 2023-24]]]]], the r
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financial year but ITC for the same was availed in returns filed for the months of April 2019 to September 2019 shall be declared here. Table 4(A) of FORM GSTR-3B may be used for filling up these details. However, any ITC which was reversed in the FY 2018-19 as per second proviso to subsection (2) of section 16 but was reclaimed in FY 2019-20, the details of such ITC reclaimed shall be furnished in the annual return for FY 2019-20. 69[For FY 2019-20, Details of ITC for goods or services received in the previous financial year but ITC for the same was availed in returns filed for the months of April 2020 to September 2020 shall be declared here. Table 4(A) of FORM GSTR-3B may be used for filling up these details. However, any ITC which was reversed in the FY 2019-20 as per second proviso to sub-section (2) of section 16 but was reclaimed in FY 2020-21, the details of such ITC reclaimed shall be furnished in the annual return for FY 2020-21.] 83[For FY 2020-21, details of ITC for goods
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= = = = = = = =
ual return for FY 2022-23.] 114[For FY 2022-23, details of ITC for goods or services received in the previous financial year but ITC for the same was availed in returns filed for the months of April, 2023 to October, 2023 filed upto 30th November, 2023 shall be declared here. Table 4(A) of FORM GSTR-3B may be used for filling up these details. However, any ITC which was reversed in the FY 2022-23 as per second proviso to sub-section (2) of section 16 but was reclaimed in FY 2023-24, the details of such ITC reclaimed shall be furnished in the annual return for FY 2023-24.] 139[For FY 2023-24, details of ITC for goods or services received in the previous financial year but ITC for the same was availed in returns filed for the months of April, 2024 to October, 2024 filed upto 30th November, 2024 shall be declared here. Table 4(A) of FORM GSTR-3B may be used for filling up these details. However, any ITC which was reversed in the FY 2023-24 as per second proviso to sub-section (2) of
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8. Part VI consists of details of other information. The instructions to fill Part VI 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 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. 48[For 71[FY 2017-18, 85[2018-19, 97[2019-20, 116[2020-21, 141[2021-22, 181[2022-23, 2023-24 and 2024-25]]]]]], the registered person shall have an option to not fill this Table.]
15E, 15F and 15G
Aggregate value of demands of taxes for which an order confi
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1[For 71[FY 2017-18, 85[2018-19, 98[2019-20, 117[2020-21, 141[2021-22, 184[2022-23, 2023-24 and 2024-25]]]]]], the registered person shall have an option to not fill this table.]
16C
Aggregate value of all deemed supplies for goods which were sent on approval basis but were not returned to the principal supplier within one eighty days of such supply shall be declared here. 51[For 71[FY 2017-18, 85[2018-19, 98[2019-20, 117[2020-21, 141[2021-22, 185[2022-23, 2023-24 and 2024-25]]]]]], the registered person shall have an option to not fill this table.]
17 & 18
Summary of supplies effected and received against a particular HSN code to be reported only in this table. It will be optional for taxpayers having annual turnover upto Rs. 1.50 Cr. It will be mandatory to report HSN code at two digits level for taxpayers having annual turnover in the preceding year above Rs. 1.50 Cr but upto Rs. 5.00 Cr and at four digits 'level for taxpayers having annual turnover above Rs. 5.00 Cr. 99[From FY
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after the due date.
9. Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in this form, through FORM DRC-03. Taxpayers shall select “Annual Return” in the drop down provided in FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger 187[or electronic credit ledger].]
*************
NOTES:-
1.
Inserted vide Notification No. 39/2018 – Central Tax dated 04-09-2018
2.
Substituted vide Notification No. 74/2018 – Central Tax dated 31-12-2018 before it was read as
“1[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 Rs. in all tables)
Nature of Supplies
Taxable Value
Central Tax
State Tax / UT Tax
Integrated Tax
Cess
1
2
3
4
= = = = = = = =
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= = = = = = = =
) to (E) above (-)
J
Debit Notes issued in respect of transactions specified in (B) to (E) above (+)
K
Supplies / tax declared through Amendments (+)
L
Supplies / tax reduced through Amendments (-)
M
Sub-total (I to L above)
N
Supplies and advances on which tax is to be paid (H + M) above
5
Details of Outward supplies on which tax is not payable as declared in returns filed during the financial year
A
Zero rated supply (Export) without payment of tax
B
Supply to SEZs without payment of tax
C
Supplies on which tax is to be paid by the recipient on r
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= = = = = = = =
+ 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 supplies liable to reverse charge but includes services received from SEZs)
Inputs
Capital Goods
Input Services
C
Inward supplies received from unregistered persons liable to reverse charge (other than B above) on which tax is paid & ITC availed
Inputs
Capital Goods
Input Servic
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;
L
Transition Credit through TRAN-II
M
Any other ITC availed but not specified above
N
Sub-total (K to M above)
O
Total ITC availed (I + N above)
7
Details of ITC Reversed and Ineligible ITC 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)
&
= = = = = = = =
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= = = = = = = =
nbsp;
J
ITC available but not availed on import of goods (Equal to I)
K
Total ITC to be lapsed in current financial year (E + F + J)
Pt. IV
Details of tax paid as declared in returns filed during the financial year
9
Description
Tax Payable
Paid through cash
Paid through ITC
Central Tax
State Tax / UT Tax
Integrated Tax
Cess
1
2
3
4
5
6
7
Integrated Tax
Central Tax
State/UT Tax
Cess
Interest
Late fee
Penalty
Other
&
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= = = = = = = =
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
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 co
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sp;
19
Late fee payable and paid
Description
Payable
Paid
1
2
3
A
Central Tax
B
State Tax
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 and in case of any reduction in output tax liability the benefit thereof has been/will be passed on to the recipient of supply.
Signature
Place
Name of Authorised Signatory
Date &n
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tions
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 are to be mentioned separately. Table 4A and Table 4C of FORM GSTR-1 may be used for filling up these details.
4C
Aggregate value of exports (except supplies to SEZs) on which tax has been paid shall be declared here. Table 6A of FORM G
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ggregate 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 and Table 9C of FORM GSTR-1 may be used for filling up these details.
5A
Aggregate value of exports (except supplies to SEZs) on which tax has not been paid shall be declared here. Table 6A of FORM GSTR
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le 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 of all input tax credit availed and reversed in the financial year for which the annual return is filed. The instructions to fill Part III are as follows:
Table No.
Instruct
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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 here. Table 4(A)(2) of FORM GSTR-3B may be used for filling up these details.
6G
Aggregate value of input tax credit received from input service dis
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= = = = = = = =
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 tax credit that has been declared by the corresponding suppliers in their FOR
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d 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 but such amendments were furnished in
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= = = = = = = =
consists of details of other information. The instructions to fill Part VI 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 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 and 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&
= = = = = = = =
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= = = = = = = =
er in the preceding year above Rs. 1.50 Cr but upto Rs. 5.00 Cr and at four digits' level for taxpayers having annual turnover above Rs. 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 GSTR1 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.]”
3.
Substituted vide Notification No. 31/2019 – Central Tax dated 28-06-2019 w.e.f. 28-06-2019 before it was read as “to September, 2018”
4.
Substituted vide Notification No. 31/2019 – Central Tax dated 28-06-2019 w.e.f. 28-06-2019 before it was read as “previous FY declared in returns of April to September of current FY or upto date of filing of annual return of previous FY whichever is earlier”
5.
Omitted vide Notification No. 31/2019 – Central Tax dated 28-06-2019 w.e.f. 28-06-2019 before it was read as,
“3. It may be noted that additional liability for the FY 2017-18 not declared in
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“to September of the current financial year or date of filing of Annual Return for the previous financial year, whichever is earlier”
11.
Substituted vide Notification No. 31/2019 – Central Tax dated 28-06-2019 w.e.f. 28-06-2019 before it was read as
“to September of the current financial year or date of filing of Annual Return for previous financial year, whichever is earlier
12.
Substituted vide Notification No. 31/2019 – Central Tax dated 28-06-2019 w.e.f. 28-06-2019 before it was read as
“to September of the current financial year or date of filing of Annual Return for the previous financial year whichever is earlier”
13.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
14.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
15.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
16.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
17.
Substituted vide Notification No. 56/2019 –
= = = = = = = =
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= = = = = = = =
4-11-2019
27.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
28.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
29.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
30.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
31.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
32.
Substituted vide Notification No. 56/2019 – Central Tax dated 14-11-2019 before it was read as “FY 2017-18”
33.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
34.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
35.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
36.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
37.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
38.
Inserted vide Notification No. 56/2019 – Central Tax dated 14-11-2019
39.
Inserted vide Notificati
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19 – Central Tax dated 14-11-2019
53.
Substituted vide Notification No. 79/2020 – Central Tax dated 15-10-2020 before it was read as,
“13[For FY 2017-18] 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 3[2018 to March 2019] 14[For FY 2018-19, ITC on inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs) received during 2018-19 but availed during April 2019 to September 2019]”
54.
Substituted vide Notification No. 79/2020 – Central Tax dated 15-10-2020 before it was read as,
“15[For FY 2017-18] Particulars of the transactions for the 4[FY 2017-18 declared in returns between April 2018 till March 2019] 16[For FY 2018-19, Particulars of the transactions for the FY 2018-19 declared in returns between April 2019 till September 2019]”
55.
Inserted vide&nb
= = = = = = = =
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= = = = = = = =
sp;before it was read as,
“36[For FY 2017-18,] Aggregate value of input tax credit availed on all inward supplies (except those on which tax is payable on reverse charge basis but includes supply of services received from SEZs) received during July 2017 to March 2018 but credit on which was availed between April 8[2018 to March 2019] shall be declared here. 37[For FY 2018-19, Aggregate value of input tax credit availed on all inward supplies (except those on which tax is payable on reverse charge basis but includes supply of services received from SEZs) received during April 2018 to March 2019 but credit on which was availed between April 2019 to September 2019 shall be declared here.] Table 4(A)(5) of FORM GSTR-3B may be used for filling up these details. 38[For FY 2017-18 and 2018-19, the registered person shall have an option to upload the details for the entries in Table 8A to Table 8D duly signed, in PDF format in FORM GSTR-9C (without the CA certification).]”
65.
Insert
= = = = = = = =
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= = = = = = = =
p;Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021
75.
Inserted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021
76.
Substituted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021 before it was read as “and 2019-20”
77.
Substituted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021 before it was read as “FY 2019-20”
78.
Substituted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021 before it was read as “2018-19 and 2019-20”
79.
Inserted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021
80.
Inserted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021
81.
Inserted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-08-2021
82.
Substituted vide Notification No. 30/2021-Central Tax dated 30-07-2021 w.e.f. 01-0
= = = = = = = =
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= = = = = = = =
on No. 14/2022-Central Tax dated 05-07-2022 before it was read as, “2019-20 and 2020-21”
91.
Inserted vide Notification No. 14/2022-Central Tax dated 05-07-2022
92.
Inserted vide Notification No. 14/2022-Central Tax dated 05-07-2022
93.
Inserted vide Notification No. 14/2022-Central Tax dated 05-07-2022
94.
Substituted vide Notification No. 14/2022-Central Tax dated 05-07-2022 before it was read as, “2019-20 and 2020-21”
95.
Inserted vide Notification No. 14/2022-Central Tax dated 05-07-2022
96.
Substituted vide Notification No. 14/2022-Central Tax dated 05-07-2022 before it was read as, “2019-20 and 2020-21”
97.
Substituted vide Notification No. 14/2022-Central Tax dated 05-07-2022 before it was read as, “2019-20 and 2020-21”
98.
Substituted vide Notification No. 14/2022-Central Tax dated 05-07-2022 before it was read as, “2019-20 and 2020-21”
99.
I
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s, “2020-21 and 2021-22”
108.
Substituted vide Notification No. 38/2023- Central Tax dated 04-08-2023 before it was read as, “89[FY 2019-20, 2020-21 and 2021-22]”
109.
Substituted vide Notification No. 38/2023- Central Tax dated 04-08-2023 before it was read as, “2020-21 and 2021-22”
110.
Inserted vide Notification No. 38/2023- Central Tax dated 04-08-2023
111.
Inserted vide Notification No. 38/2023- Central Tax dated 04-08-2023
112.
Inserted vide Notification No. 38/2023- Central Tax dated 04-08-2023
113.
Substituted vide Notification No. 38/2023- Central Tax dated 04-08-2023 before it was read as, “2020-21 and 2021-22”
114.
Inserted vide Notification No. 38/2023- Central Tax dated 04-08-2023
115.
Substituted vide Notification No. 38/2023- Central Tax dated 04-08-2023 before it was read as, “2020-21 and 2021-22”
116.
Substituted vide Notification No. 38/2023- Central Tax dated 04-08-2023 before it was read as, “2020-21 and 2021-22”
117.
Substituted vide Notificatio
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p;w.e.f. 10-07-2024
125.
Inserted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024
126.
Inserted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024
127.
Inserted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024
128.
Substituted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024 before it was read as, “2021-22 and 2022-23”
129.
Inserted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024
130.
Substituted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024 before it was read as, “108[FY 2019-20, 2020-21, 2021-22 and 2022-23]”
131.
Substituted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024 before it was read as, “2021-22 and 2022-23”
132.
Inserted
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ore it was read as, “2021-22 and 2022-23”
141.
Substituted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024 before it was read as, “2021-22 and 2022-23”
142.
Substituted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024 before it was read as, “2021-22 and 2022-23”
143.
Inserted vide Notification No. 12/2024 – Central Tax dated 10-07-2024 w.e.f. 10-07-2024
144.
Substituted vide Notification No. 20/2024 – Central Tax dated 08-10-2024 w.e.f. 08-10-2024 before it was read as,
“A
ITC as per GSTR-2A (Table 3 & 5 thereof)
”
145.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
146.
Omitted vide Notification No. 13/2025-Central Tax dated 17-09-202
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ax dated 17-09-2025 w.e.f. 22-09-2025
153.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as,
“I
Difference (G-H)
”
154.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as,
“9
Description
Tax Payable
Paid through cash
Paid through ITC
Central Tax
State Tax / UT Tax
Integrated Tax
Cess
1
2
3
4
5
6
7
Integrated Tax
Central Tax
State/UT Tax
Cess
Interest
Late fee
Penalty
Other
 
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22-09-2025 before it was read as,
“1. Terms used:
a. GSTIN: Goods and Services Tax Identification Number
b. UQC: Unit Quantity Code
c. HSN: Harmonized System of Nomenclature Code”
157.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
158.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
159.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
160.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
161.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as, “2022-23 and 2023-24”
162.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as, “2022-23 and 2023-24”
163.
Substituted vide&nb
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sp;
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
171.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
172.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as,
“6M
Details of ITC availed but not covered in any of heads specified under 6B to 6L above shall be declared here. Details of ITC availed through FORM ITC-01 and FORM ITC-02 in the financial year shall be declared here.”
173.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as,
“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
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;Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
175.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
176.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
177.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
178.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
179.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
180.
Inserted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025
181.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025 w.e.f. 22-09-2025 before it was read as, “2022-23 and 2023-24”
182.
Substituted vide Notification No. 13/2025-Central Tax dated 17-09-2025&n
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Affordable Housing Construction Services Under 12% GST; Standard Rate Applies for Flats Over 60 Sqm (Heading 9954.
Affordable Housing Construction Services Under 12% GST; Standard Rate Applies for Flats Over 60 Sqm (Heading 9954.
Case-Laws
GST
Rate of GST – construction services – Affordable Housing – The applicant’s case is covered under the tax rate of 12%, under Heading 9954 (Construction Services) – In case of other flats which have carpet area more than 60 sq.mtrs. the applicant would be required to pay GST at normal applicable rate.
TMI Updates – Highlights, quick notes, marquee, annotat
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Charitable trust's religious activities deemed “business” under Central and Maharashtra GST Acts, subject to tax provisions.
Charitable trust's religious activities deemed “business” under Central and Maharashtra GST Acts, subject to tax provisions.
Case-Laws
GST
Charitable Trust – scope of the term 'Business' – Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? – Held Yes.
TMI Updates
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GST Regime Transition: No Input Tax Credit for Unutilized CENVAT Credit, Including Education and Krishi Kalyan Cess.
GST Regime Transition: No Input Tax Credit for Unutilized CENVAT Credit, Including Education and Krishi Kalyan Cess.
Case-Laws
GST
Input Tax Credit – transition to GST Regime – The input tax
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M/s. Indian Institute of Logistics Pvt. Ltd. Versus Principal Commissioner of GST Central Excise, Directorate General of Central Excise Intelligence, Indian Bank
M/s. Indian Institute of Logistics Pvt. Ltd. Versus Principal Commissioner of GST Central Excise, Directorate General of Central Excise Intelligence, Indian Bank
Service Tax
2018 (9) TMI 395 – MADRAS HIGH COURT – TMI
MADRAS HIGH COURT – HC
Dated:- 5-9-2018
W.P.No.22129 of 2018 WMP No.25932 of 2018
Service Tax
K. Ravichandrabaabu, J.
For the Petitioner : Mr.Sarath Chandran for M/s.G.R.Associates
For the Respondents : Mrs.Aparna Nandakumar for R1 Mr.V.Sundareswaran for R2 Senior Standing Counsel Mr.Kalyanaraman for R3 for M/s.Aiyar & Dolia
ORDER
Mr. Kalyanaraman, learned counsel takes notice for the third respondent.
2.Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondents.
3. The petitioner seeks for a mandamus directing the respondents 1 and 2 to de-freeze bank account bearing No. 753341477 operated at the third respondent Bank.
4.The petitioner is an institution providing educational services in logisti
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y activities of the petitioner. It is further contented that unless the petitioner is able to operate the said bank account, they will not be in a position even to file the statutory appeal against the order of the first respondent dated 05.03.2018, since such appeal has to be filed along with pre-deposit payment, as required under the relevant provision of law. Therefore, it is contended that the respondents 1 and 2 should be directed to permit the petitioner to operate the bank account by de-freezing the same.
6.Learned counsels appearing for the respondents 1 and 2, on the other hand, submitted that though the order was passed by the first respondent on 05.03.2018, the petitioner has not filed the statutory appeal before the CESTAT till this date. Therefore, the impugned action of the respondents 1 and 2 cannot be found fault with.
7.It is seen that the petitioner suffered an order in original dated 05.03.2018 passed by the first respondent imposing service tax as well as penalty.
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im relief, which includes regarding the operation of the subject matter bank account for the balance amount available in the account. At this juncture, the learned counsel for the third respondent bank submitted that the petitioner may be permitted to operate only in the event when there is no due payable by the petitioner to the third respondent bank on any other account or liability. Needless to say that operation of the bank account, by virtue of this order is available to the petitioner at the hands of the third respondent bank, provided if there is no other legal impediment.
9. Accordingly, this writ petition is disposed of by directing the respondents 1 and 2 to permit the petitioner to operate the bank account, only to the extent of the amount liable to be made as pre-deposit, while preferring the appeal. The third respondent shall also monitor such operation so that the petitioner does not exceed the withdrawal over and above the pre-deposit amount. As already stated supra, it
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In Re: Brink's India Private Limited
In Re: Brink's India Private Limited
GST
2018 (9) TMI 443 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-61/2018-19/B-107
GST
SHRI B. V. BORHADE, 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 Brink's India Private Limited, the applicant, seeking an advance ruling in respect of the following questions :
1. Whether
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In Re: Brink's India Private Limited
In Re: Brink's India Private Limited
GST
2018 (9) TMI 444 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-60/2018-19/B-106
GST
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 Brink's India Private Limited, the applicant, seeking an advance ruling in respect of the following questions :
1. Wheth
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In Re: Brink’s India Private Limited
In Re: Brink’s India Private Limited
GST
2018 (9) TMI 445 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-59/2018-19/B-105
GST
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 Brink's India Private Limited, the applicant, seeking an advance ruling in respect of the following question:
“Considering
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IN RE: AF GARMENTS PRIVATE LIMITED
IN RE: AF GARMENTS PRIVATE LIMITED
GST
2018 (9) TMI 446 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-49/2018-19/B-104
GST
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 AF GARMENTS PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the questions asked were in relation to the
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and requested for admission of application as per contentions made in their application. The Applicant was directed to reframe his questions as discussed within one week and it was informed to them that application would be treated as made from the date of reframing, but applicant has filed letter dated 03.09.2018 received on 04.09.2018 in this office with request to allow withdrawal of the application filed on 30.06.2018.
The request of the applicant to withdraw the application voluntarily and unconditionally is hereby allowed without going into the merits or detailed facts of this advance ruling application by this authority.
ORDER
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services
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IN RE: JAIDEEP METALLICS & ALLOYS PRIVATE LIMITED
IN RE: JAIDEEP METALLICS & ALLOYS PRIVATE LIMITED
GST
2018 (9) TMI 447 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-37/2018-19/B-103
GST
SHRI B.V. BORHADE, 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 JAIDFEP METALLICS & ALLOYS PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following que
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Supersmelt Sponge Private Limited. Versus Superintendent, (Anti Evasion), Central Tax, C.G.S.T. Commissionerate, Bolpur & Ors.
Supersmelt Sponge Private Limited. Versus Superintendent, (Anti Evasion), Central Tax, C.G.S.T. Commissionerate, Bolpur & Ors.
GST
2018 (9) TMI 611 – CALCUTTA HIGH COURT – TMI
CALCUTTA HIGH COURT – HC
Dated:- 5-9-2018
W. P. 17113 (W) of 2018
GST
Debangsu Basak, J.
Mr. Anil Dugar Mr. Rajarshi Chatterjee …for the petitioner
Mr. Somnath Ganguli Mr. Bhaskar Prosad Banerjee …for the respondent nos. 1, 2 & 4.
Mr. Dipayan Kundu …for the respondent nos.6 to 8.
Mr. Kausik Chanda, Additional Solicitor General Mr. R.V. Kundalia …for the Union of India
The petitioner seeks setting aside of a notice issued in form GST MOV-07 by the respondent no.2.
Learned advocate appearing for the petitioner submits that, the petiti
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ot exist. The appeal may have been received by the Commissionerate at Bolpur.
Since the petitioner has preferred an appeal, may be at a wrong forum, it would be appropriate to direct the Bolpur Commissionerate to transmit the records of such appeal to the appellate authority of Siliguri Commissionerate, within a period of seven days from date. The petitioner is at liberty to proceed with its appeal before the appropriate forum, in accordance with law.
All the points with regard to the stay of the order impugned in the appeal proceedings are kept open to be decided in such appeal, in accordance with law.
Since the owner of the vehicle is not before the Court, seeking the release of the vehicle, no order need be passed on such issue
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M/s Bajrang Kripa Agro Industries Pvt. Ltd. Versus Union of India And 4 Others
M/s Bajrang Kripa Agro Industries Pvt. Ltd. Versus Union of India And 4 Others
GST
2018 (9) TMI 612 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 5-9-2018
Writ Tax No. – 1199 of 2018
GST
Bharati Sapru And Surya Prakash Kesarwani JJ.
For the Petitioner : Vishwjit
For the Respondent : A.S.G.I.,C.S.C.
ORDER
Heard Sri Vishwjit, learned counsel for the petitioner, Sri O.P. Srivastava, learned Counsel for the respondents no.1, 2 & 3, learned Standing Counsel appears for the respondent nos.4 and 5.
The petitioner seeks a writ of mandamus directing the GST council respondent no.2 to make recommendations to the State Government to extend the time period for filing of GST Tran- 1 in the case of the petition
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M/s Noida Power Company Ltd. Versus Union of India And 4 Others
M/s Noida Power Company Ltd. Versus Union of India And 4 Others
GST
2018 (9) TMI 687 – ALLAHABAD HIGH COURT – TMI
ALLAHABAD HIGH COURT – HC
Dated:- 5-9-2018
Writ Tax No. – 1045 of 2018
GST
Bharati Sapru And Surya Prakash Kesarwani JJ.
For the Petitioner : Rahul Agarwal,Dhru Agarwal,Manish Panda
For the Respondent : A.S.G.I.,Ashok Singh,B.K.Singh Raghuvanshi
ORDER
Heard Sri Dhru Agarwal learned senior counsel assisted by Sri Manish Panda learned counsel for the petitione
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FILCO TRADE CENTRE PVT. LTD. Versus UNION OF INDIA
FILCO TRADE CENTRE PVT. LTD. Versus UNION OF INDIA
GST
2018 (9) TMI 885 – GUJARAT HIGH COURT – 2018 (17) G. S. T. L. 3 (Guj.)
GUJARAT HIGH COURT – HC
Dated:- 5-9-2018
R/SPECIAL CIVIL APPLICATION NO. 18433 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 20185 of 2017
GST
MR. AKIL KURESHI AND MR. B.N. KARIA JJ.
Appearance:
UCHIT N SHETH(7336) for the PETITIONER(s) No. 1,2
JAIMIN A GANDHI(8065) for the RESPONDENT(s) No. 2
MS TRUSHA K PATEL(2434) for the RESPONDENT(s) No. 1
ORAL JUDGMENT (PER : MR.JUSTICE AKIL KURESHI)
1. The petitions arise in similar background. For convenience, we may record facts from Special Civil Application No.18433/2017.
2. Petitioner no.1 is a company registered under the Companies Act and would here-in-after be referred to as “the petitioner company”. Petitioner no.2 is the Director of the company. Petitioner company is engaged in trading of specialized industrial bearings of various types. The petitioner also imports certain goods. Unde
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age dealers were not granted similar benefits in some form or the other, the petitioners' business would become wholly unviable. If the petitioners were loaded with the burden of excise duty, the petitioners' sales to its ultimate consumers or second stage dealers would be commercially non viable. Instead, the purchasers would be made directly from the manufacturer. The law existing prior to introduction of GST therefore, made suitable provisions to ensure that the first stage dealers like the petitioners are not burdened with the excise duty component. We would advert to these provisions in detail at a later stage. Suffice it to record at this stage that as long as the petitioners fulfill the necessary conditions provided in the said Rules of 2004, the petitioners could pass on the credit of the duty paid on the purchases to their purchasers-manufacturers.
4. The Union legislature framed different laws to usher in the GST regime in substitution of the existing Central Excise
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to the new regime. Section 140 contains provisions for transitional arrangements for input tax credit. Sub-section(3) of section 140 allows several classes of persons including first stage dealers to take credit of the eligible duties of the finished goods held in stock on the appointed day subject to conditions prescribed therein. Clause(iv) of sub-section(3) of section 140 imposes a condition that such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day. It is this condition which has aggrieved the petitioners and the constitutional validity thereof is challenged before us.
5. Case of the petitioners in nutshell is that prior to enactment of IGST Act, the petitioner company as a first stage dealer was not burdened with the excise duty paid on the purchases and this was without any restriction on time during which the goods must be sold. In earlier regime, the first stage dealers were put at part with manufacturer
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by pointing out that in case of manufactures claiming credit co-relation of tax paid goods and the goods sold was not necessary, unlike in case of dealers where such co-relation is essential. In case of dealers, in earlier law, they were entitled to pass on CENVAT credit of the duty paid to the manufacturer to the purchaser. This required co-relation of the goods and the duty paid. In such background, it is contended that “since the physical identification of goods is necessary for the same, so as to ensure that the first stage dealers do not take any undue advantage of such benefit and so as to accommodate the administrative convenience, the stature has provided for the restriction of 12 months.” The petitioners' case was also distinguished from the case of an unregistered dealer by pointing out that under section 140 of the CGST Act, limited benefits have been granted to unregistered dealers.
7. In background of such facts and pleadings, learned counsel Shri Uchit Sheth for the
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in respect of CVD also similarposition would obtain. CVD is meant to off-set the element of excise duty to put the imports on same pedestal as a local manufacturer. Here also, for any of the imports made prior to one year, CVD component by virtue of section 140(3) of CGST Act would have to be borne by the petitioners.
4) Counsel further submitted that impugned statutory provisions take away the vested right. Under the old regime, the duty borne by the petitioners on the goods purchased from the manufacturer or paid in the form of CVD on imports were granted CENVAT credit which could be utilised for discharge of duty liabilities. Such benefit is withdrawn in respect of goods which are purchased or imported one year before. The law thus acts with retrospective effect. There is no plausible reason or logic provided for making such retrospective tax legislation.
5) In support of his contentions, counsel relied on the following judgments :
i) Decisions in case of Eicher Motors Ltd. v. U
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ing statutes must be in conformity with Article 14 of the Constitution :
a) The State of AP and another v. Nalla Raja Reddy and others reported in AIR 1967 Supreme Court 1458.
b) John Vallamattom and another v. Union of India reported in AIR 2003 Supreme Court 2902.
c) Kunnathat Thathunni Moopil Nair etc. v. State of Kerala and another reported in AIR 1961 Supreme Court 552.
Certain other decisions were cited in the context of testing a taxing statute framed by the parliament and the parameters within with the Court would strike down the statute. To the extent necessary, we would refer to these judgments at an appropriate stage.
8. On the other hand, learned ASGs Shri Jaimin Gandhi and Ms. Trusha Patel opposed the petitions. Their contentions were :
1) In taxing statutes, parliament has much greater latitude. The Court would not expect precise or scientific division before approving the classification.
2) It is not a case of hostile discrimination. First stage dealers form a
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e purchases were made not prior to one year.
5) In support of the contentions, counsel relied on the following judgments :
i) Heavy reliance was place on the decision of Division Bench of Bombay High Court in case of JCB India Limited and others v. Union of India and others, judgment dated 20.3.2018 in Writ Petition No. 3142/2017 and connected matters, in which this very provision came to be challenged. The High Court dismissed the petition upholding the vires of the provisions.
ii) Following judgements were cited in support of the contention that legal incidence of sales tax falls on the dealer, he may, if the law permits, pass it on to the purchaser, however, it is not necessary that the taxing statute must permit it and the tax cannot be declared invalid merely because the provision does not permit the dealer to pass it on purchaser:
a) M/s.J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh and another reported in AIR 1961 Supreme Court1534.
b) Konduri Buchirajalingam v. Th
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t of the contention that in taxing statute, the legislature enjoys greater latitude.
vi) On the basis of decisions in case of Ramrao and others v. All India Backward Class Bank Employees Welfare Association and others reported in (2004) 2 Supreme Court Cases 76 and in case of University Grants Commission v. Sadhana Chaudhary and others reported in (1996) 10 Supreme Court Cases 536, it was canvassed that it is always open for the legislature to introduce a cut-off date for granting any benefit. Merely because such cut-off date creates two classes, would not be a ground to hold that the law is unconstitutional.
vii) Referring to the decisions in case of R.K. Garg v. Union of India and others reported in (1981) 4 Supreme Court Cases 675 and in case of Government of Andhra Pradesh and others v. Smt. P. Laxmi Devi (SMT) reported in (2008) 4 Supreme Court Cases 720, it was argued that State collects tax in exercise of its eminent domain and wisdom of legislature is therefore, not amenabl
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the legislation in question imposes a burden with retrospective effect and in absence of any justification for the same, is not a valid statute?
3) On any of the grounds above, whether clause(iv) of subsection (3) of section 140 of the CGST Act is required to be declared unconstitutional?
10. Before taking up these questions for consideration, we may peruse the statutory provisions applicable more minutely.
11. As is well known in the tax structure existing prior to introduction of GST regime, a manufacturer or producer of a specified product or a provider of input service was allowed to take credit of the excise duties paid by him. Clause (ij) of Rule 2 of the Rules of 2004 define the term “first stage dealer” as under :
(ij) “first stage dealer” means a dealer, who purchases the goods directly from,-
(i) the manufacturer under the cover of an invoice issued in terms of the provisions of Central Excise Rules, 2002 or from the depot of the said manufacturer, or from premises of th
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aid. Like-wise clause(c) of sub-rule (1) of Rule 9 pertained to bill of entry. Sub-rule (4) of Rule 9 enables purchase of input or capital goods from a first stage dealer or second stage dealer, provided certain conditions are fulfilled. Sub-rule(4) reads as under :
“(4) The CENVAT credit in respect of input or capital goods purchased from a first stage dealer or second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the case may be, has maintained records indicating the fact that the input or capital goods was supplied from the stock on which duty was paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him :
Provided that provisions of this sub-rule shall apply mutatis mutandis to an importer who issues an invoice on which CENVAT credit can be taken.”
13. As per sub-rule(8) of Rule 9, a first stage dealer or a second stage dealer had to submit withi
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ons which may be prescribed. Section 140 also contained in said Chapter XX is of considerable importance for us and carries caption note Transitional arrangement for input tax credit. Sub-section (3) of section 140 reads as under:
“140. Transitional arrangements for input tax credit.
(3 ) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012-Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely:
(i) such inputs or goods are u
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allowed to take credit at such rate and in such manner as may be prescribed.”
15. As per this provision, several classes of persons including a first stage dealer would be entitled to take in his credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to fulfillment of conditions specified therein. The petitioners have no grievance about any of the conditions except condition No. (iv) which provides that such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day. This condition would limit the eligibility of a first stage dealer to claim credit of the eligible duties in respect of goods which were purchased from the manufacturers prior to twelve months of the appointed day.
16.While considering the rival contentions with respect to the constitutionality of this provision, we may broadly refer to the
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ers for the purpose of promotion. It was observed that classification on the basis of educational qualifications made with a view to achieving administrative efficiency cannot be said to rest on any fortuitous circumstances and one has always to bear in mind the facts and circumstances in order to judge the validity of a classification. It was observed that there is a presumption of constitutionality of a statute. The burden is on one who canvasses that certain statute is unconstitutional to set out facts necessary to sustain the plea of discrimination and to adduce cogent and convincing evidence to prove those facts. In order to establish that the protection of the equal opportunity clause has been denied to them, it is not enough for the petitioners to say that they have been treated differently from others, not even enough that a differential treatment has been accorded to them in comparison with other similarly circumstanced. Discrimination is the essence of classification and does
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own only if it is found not saved by any of the clauses (2) to (6). No enactment can be struck down by just saying that it is arbitrary or unreasonable. 'Arbitrariness' is an expression used widely and rather indiscriminately-an expression of inherently imprecise import. Hence, some or the other constitutional infirmity has to be found before invalidating the Act. An enactment cannot be struck down on the ground that the Court thinks it unjustified. Parliament and legislatures, composed as they are of the representatives of the people and supposed to know and be aware of the need of the people and every what is good and bad for them. The Court cannot sit on the judgement over their wisdom.
19.In the recent judgement of the Supreme Court in case of Shayra Bano vs. Union of India and ors reported in (2017) 9 SCC 1, Rohinton Fali Nariman, J., however, expressed a somewhat different view. It was observed that a statute can also be struck down if it is manifested arbitrary. It was
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d out by us above would apply to negate legislation as well under Article 14.”
20. It is well settled that as long as the legislation has necessary competence to frame a law and the law so framed is not violative of the fundamental rights enshrined in the constitution or any of the constitutional provision, the Court would not strike down the statute merely on the perception that the same is harsh or unjust. Particularly, in taxing statutes the Courts have recognized much greater latitude in the legislation in framing suitable laws. Reference in this respect can be made to the well known judgement of Supreme Court in case of R.K.Garg vs. Union of India and ors (supra) it was observed as under:
“8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play
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ded to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events-self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.
The court must always remember that “legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry” that exact wisdom and nice adoption of remedy are not always possible and that “judgment is largely a prophecy based on meagre and un-interpreted experience”. Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipat
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legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues.”
21. It is equally well settled that wherever the parliament has the power to frame a statute it also includes the power to make the law retrospective. In other words, the parliament also has wide powers to frame the laws including taxing statutes with retrospective effect. However, the Courts have recognized certain inherent limitations in framing retrospective tax legislations.
22. In Tata Motors Ltd vs. State of Maharashtra and ors reported (2004) 5 SCC 783, it was observed that it is undoubtedly true that the legislature has the powers to make laws retrospectively
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his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips vs. Eyre[3], a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law.
32. The obvious basis of the principle against retrospectivity is the principle of 'fairness', which must be the basis of every legal rule as was observed in the decision reported in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co.Ltd[4]. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative inte
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it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Government of India & Ors. v. Indian Tobacco Association[5], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra & Ors.[6] It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here.”
24.In case of Jayam and Co. vs. Assistant Commissioiner and anr. reported in (2016) 15 SCC 125, the Supreme Court noted as approval observations made in case of R.C.Tobacco (P.) Ltd vs. Union of India reported in (2005) 7 SCC 725 as under:
“14. With this, let us advert to
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osed for the past period;
(vi) Length of time is not by itself decisive to affect retrospectivity.”
25.We may now come to the nature of the right enjoyed by the petitioner as a first stage dealer prior to introduction of GST and the changes made by the new law concerning the petitioner's right to enjoy such benefits. As already recorded, the statutory provisions till enactment of goods and service tax statutes recognized the right of the petitioner to pass on credit of the duty on manufactured goods purchased from manufacturers. In some form or the other the burden of duty element of the goods so purchased or the CVD value of the imported goods would be shifted from the petitioner-company as first stage dealer. Duty element suffered on the goods purchased from manufacturers would be neutralized at the time of sale of such goods by the dealer. In case of Eicher Motors Ltd vs. Union of India (supra), the Supreme Court considered the nature of Modvat credit and observed that if on
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Rules do not make any provision for reversal of the credit. The credit is therefore, indefeasible. The Supreme Court therefore, reiterated that a credit under the Modvat scheme is as good as tax paid. In case of Jayswal Neco Ltd vs. Commissioner of Central Excise, Raipur reported in 2015 (322) LET 587 (SC), these principles were applied to hold that even in a situation where on account of delay in payment of duty within stipulated time the facility of payment of excise duty in installments on fortnightly basis is suspended, the assessee could pay the duty through CENVAT credit.
26. In case of Indusr Global Ltd vs. Union of India reported in 2014 (310) ELT 833 Guj Division Bench of this Court was considering vires of Rule 8 (3A) of the Central Excise Rules, 2002 which provided that if an assessee defaults in payment of duty beyond thirty days from the date prescribed under subrule (1) then notwithstanding anything contained in the sub-rule(1), the assessee shall pay excise duty for eac
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uct. In the said case, the Supreme Court was dealing with rule 57F which was introduced in the Central Excise Rules, 1944 under which credit lying unutilized in the Modvat credit account of an assessee on 16th March 1995 would lapse. Such provision was questioned. The Supreme Court held that since excess credit could not have been utilized for payment of the excise duty on any other product, the unutilised credit was getting accumulated. For the utilization of the credit, all vestitive facts or necessary incidents thereto had taken place prior to 16.3.1995. Thus the assessees became entitled to take the credit of the input instantaneously once the input is received in the factory of the manufacturer of the final product and the final product which had been cleared from the factory was sought to be lapsed. The Supreme Court struck down the rule further observing that if on the inputs the assessee had already paid the taxes on the basis that when the goods are utilized in the manufacture
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sessee to the Government revenue which could be utilised by the purchasers of such goods from the petitioner against future liabilities of course subject to fulfillment of conditions. When the new regime was therefore introduced through goods and service tax statutes, through migration these existing rights were being adjusted in terms of provisions contained in sections 139 and 140 of the CGST Act. The legislature also recognized such existing rights and largely protected the same by allowing migration thereof in the new regime. In the process, however, a condition was imposed to enable the assessees in the nature of first stage dealer such as the present petitioner-company viz. that the invoices or other prescribed documents on the basis of which credit was claimed were issued not earlier than twelve months immediately preceding the appointed day. In effective terms, this condition restricted the enjoyment of existing credit in respect of goods purchased not prior to one year of the
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r to one year from the appointed day. No such restriction existed in the prior regime. Merely the stated grounds in the affidavit in reply that the provision is introduced since physical identification of goods is necessary so as to ensure that the first stage dealers do not take any undue advantage of such benefit and also to accommodate the administrative convenience would not be sufficient. Firstly, as noted, there was no such restriction in the CENVAT Credit Rules or analogous provisions of similar rules in the past. Since decades therefore the credits would be available to a first stage dealer on all purchases towards the manufacturing duty. No time frame of the past dealings was envisaged under such rules. The same grounds of physical identification of goods preventing undue advantage being taken and the administrative convenience would exist even then. Secondly, no limitation of time is prescribed in the proviso to sub-section (3) of section 140 where a dealer is not in possessi
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. In other words, from the date of introduction of the proviso, the benefit of utilization of CENVAT credit under certain circumstances would be restricted to a period of six months. This provision thus, did not act with retrospective effect.
29. We are conscious that the Bombay High Court in case of JCB India Limited and others v. Union of India and others(supra) has taken a different view. We have given our detailed reasons for the view that we have adopted. Needless to record, we are unable to adopt the line chosen by the Bombay High Court in case of JCB India Limited and others v. Union of India and others(supra).
30. To sum up we are of the opinion that the benefit of credit of eligible duties on the purchases made by the first stage dealer as per the then existing CENVAT credit rules was a vested right. By virtue of clause (iv) of sub-section (3) of section 140A such right has been taken away with retrospective effect in relation to goods which were purchased prior to one year
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IN RE: THE IDEAL CONSTRUCTION
IN RE: THE IDEAL CONSTRUCTION
GST
2018 (9) TMI 974 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (17) G. S. T. L. 80 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-01/2018-19/B-109
GST
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 THE IDEAL CONSTRUCTION, the applicant, seeking an advance ruling in respect of the following questions :
1. What is the rate of tax to be levied on the sale of Flats/ Units to the prospective buyers? And whether registration of project under Pradhan Mantri Awas Yojana is required?
2. What is the rate of tax to be levied by the supplier f
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rtnership firm duly registered under GST. The nature of business of the firm is that of builders and developers. The said firm is desirous to undertake an affordable housing project in Kolhapur. The land required for the project is already possessed by the Firm. The firm is currently in the process of designing and planning for the said project. The units to be constructed in the said project will be of upto 30 sqmtrs(EWS) or upto 60 sqmtrs (LIG). The firm is considering following two options regarding the activities of the project.
1. To undertake construction activity on its own. In this case the required material, labour etc and all other ancillary activities Will be undertaken by the firm itself. In that case the majority of tax rate on inward supplied will be of the rate 18% or 28%.
2. To sublet the entire construction activity to a third party contractor. In this case our inward supply will be in the form of a composite works contract service.
Since the impact of GST on costin
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the following sub-items shall be inserted, namely: –
(da) a civil structure or any other original works pertaining to the “Economically Weaker Section (EWS) houses” constructed under the Affordable Housing in partnership by State or Union territory or local authority or urban development authority under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);
(db) a civil structure or any other original works pertaining to the '”houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/' Lower Income Group (LIG)/ Middle Income Group-1 (MIG-1)/ Middle Income Group-2 (MIG-2)” under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);';
As regards insertion of clause (db) above, flats/units in our project may be some times acquired by persons coming under EVVS/LIG/MIG-1/MlG-2 etc. So in that case what is the rate of tax to be applied? What documents to be collected from prospective buyer
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the affordable housing projects are given “infrastructure” status under the category of 'Social and Commercial Infrastructure” by adding a new sub-sector – “Affordable Housing”. In the same notification affordable housing is defined as 10 “Affordable Housing” is defined as a housing project using at least 50% of the Floor Area Ratio (FAR)/Floor Space Index (FSI) for dwelling units with carpet area @ of not more than 60 square meters.
@ “Carpet Area” shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016.
Thus as per our interpretation we will be covered by the above said notification issued by Ministry of Finance, Department of Economic Affairs vide F.NO. 13/6/2009-INF, dated 30th March. And our project Will be covered in clause (da) under item (v) of serial no 3 of the amended notification 11/2017 dated 28/6/17. And the rate of tax applicable will be CGST 6% and SGST 6%) irrespective of the status Of t
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or is providing the works contract service to the affordable housing project the rate of tax which he will be levying in his tax invoice will have to be 12% and not 18%.
3. Admissibility of Input tax credit. Whether full ITC is allowable or it will be restricted to output GST liability?
If the rate of tax to be levied on our outward supply of works contract service is 12% (Effective rate after land deduction 8%), In this case our purchases or inward supplies will be of the rate 12% or 18% or 28% as the case may be. Thus there will be a considerable amount of ITC (Input Tax Credit) available in our electronic credit ledger. Section 16 of CGST Act specifies the Eligibility and conditions for taking input tax credit subject to conditions and restrictions mentioned in section 49. Section 17 lets the conditions for Apportionment of credit and Blocked credit. In our opinion we are not covered under sub section 5(c) of section 17 as the inward works contract service will be input service f
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nic credit ledger can be claimed as refund.
Vide further communication the applicant has submitted the Area Statement as follows:-
Area of Plot
16090.00 sq mtrs.
Less- Amenity Space
810.00 sq mtrs.
Net Plot Area
15280.00 sq mtrs.
Total consumed FSI of the plot
26055.00 sqmtrs.
FSI Area consumed in flats having carpet area below 60 sq mtrs.
26055.00 sq mtrs.
FSl Area consumed in flats having carpet area above 60 sq mtrs.
NIL
FSI consumed
1.7
03. CONTENTION – AS PER THE CONCERNED OFFICER
No contentions has been filed by the department in the matter.
04. HEARING
The Preliminary Hearing was held on date 24.04.2018. Shri Kedar P Hasabnis, Chartered Accountant, duly authorized appeared along with Shri Atul Powar, partner and Shri Anand Bhogle, Accountant. They orally contended for admission of their application in view of detailed submissions made by them. They were informed that in respect of Question No. 2, the question could only be raised by their supplier, and they
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ct under Pradhan Mantri Awas Yojana is required?
This issue is with respect to the affordable housing projects to be undertaken by the applicant in Kolhapur. The applicant has submitted that on the land already in possession with them, they are proposing to construct units which will be of upto 30 square meters [Economically Weaker Section (EWS) houses] or upto 60 sq.mtrs [Lower Income Group (LIG) houses].
Notification No. 11/2017-Central Tax (Rate) dated 28.062017, has specified the rate of central tax to be levied on Intra State supply of services of description specified in Column 3 of the Table in the said Notfn, falling under scheme of classification of services mentioned therein. The relevant clauses of the said Notfn as amended by Notfn No. 20/2017-Central Tax (Rate) dated 22.10.2017 is reproduced below:-
Sl.No.
Chapter, Section or Heading
Description of Service
Rate (per cent)
Condition
3.
Heading 9954 (Construction services)
(iv) Composite supply of works contract a
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……………………………; or
(f) ………………………………………………………………….;
6
-]
(v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,-
(a) ………………………………………………………………….;
(b) ………………………………………………………………….;
(c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under-
(1) the “Affordable Housing in Pa
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a) a civil structure or any other original works pertaining to the “Economically Weaker Section (EWS) houses” constructed under the Affordable Housing in partnership by State or Union territory or local authority or urban development authority under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (Urban);
(db) a civil structure or any other original works pertaining to the “houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/ Lower Income Group (LIG)/Middle Income Group-I (MIG-I)/ Middle Income Group-2 (MIG-2)” under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);';
(III) ………………………………………………………………….”;
(B) in item (v),
(l) in sub-item (a), for the word “excluding”
(Il) after sub-item (d), the following sub-item shall be inserted, namely: –
“(da) low-cost houses up to a carpet area of 60 square metres per house in an affordable h
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oup (LIG)/ Middle Income Group-I (MIG-I)/ Middle Income Group-2 (MIG-2)” under the Housing for All (Urban) Mission/ Pradhan Mantri Azoas Yojana (Urban). This clause also shall not be applicable to the applicant since this clause states that the houses should be constructed or acquired under the Credit Linked Subsidy Scheme of the Government.
According to sub item (da) of item (v), “low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No, 13/6/2009-INF, dated the 30th March, 2017 would attract a tax rate of 12%. This clause will be applicable to the applicant if the project undertaken by them is an affordable housing project which has been given infrastructure status Vide Government of India notification mentioned above.
Department of Economic Affairs' notification issued vide F. No. 13/6/2
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ucture status to Affordable Housing. The recommendation of the Council would extend the concessional rate to construction of flats/ houses of less than 60 sqm in projects other than the projects covered by any scheme of the Central or State Government also. The GST Council has also observed that “It may be recalled that all inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land). As a result, the builder or developer will not be required to pay GST on the construction service of flats etc, in cash but would have enough ITC (input tax credits) in his books to pay the output GST, in which case, he should not recover any GST payable on the flats from the buyers. He can recover GST from the buyers of flats only if he recalibrates the cost of the flat after factoring in the full ITC available in
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ject or not, shall be determined by the builder/ developer as per the definition of affordable housing given in the above mentioned notification (i.e., affordable housing has been defined as a housing project using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 SQM). No certificate from any authority is required.”
The applicant in their submissions have stated that the entire FSI of 26055.00 sq mtrs. are consumed in flats having an area less than 60 sq mtrs. Hence, from a reading of the above clarification, notification and the clause (day of item (v) of Notification No. 11/2017-CentraI Tax (Rate) dated 28.06.2017, we find that that the applicant's case is covered under the tax rate of 12%, under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended since the project undertaken by them falls under the definition of “Affordable Housing” as stated by them in the application (Whether the housing project
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e eligibility and conditions for availing input tax credit. Section 16 to Section 20 of the GST Act deals with Input Tax Credit. The GST Council in its 25th meeting held on 18th January 2018 at Delhi has extended concessional rate of 12% (8% GST after deducting value of land) to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The GST Council has also observed that “It may be recalled that all inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land). As a result, the builder or developer will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in his books to pay the out
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In Re: Giriraj Renewables Private Limited
In Re: Giriraj Renewables Private Limited
GST
2018 (9) TMI 1183 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – [2019] 64 G S.T.R. 303 (AAR)
APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – AAAR
Dated:- 5-9-2018
MAH/AAAR/03/2018-19 – MAH/AAAR/SS-RJ/08/2018-19
GST
SMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER
PROCEEDINGS
(under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
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 provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGS
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med that he could not file an appeal as also because the appellant filed within one month of formation of the authority, the delay is condoned.
Brief Facts of the case
A. Appellant enters into contracts with various Developers who desire to set up and operate solar photovoltaic plants for supply of power generated. In various cases, the Appellant also is a Project developer wherein it is engaged in operation of renewable energy power plant projects.
B. Typically a contract is entered into by the Appellant to do end to end setting up of a solar power plant which includes supply of various goods (such as modules, structures, inverter transformer etc.) as well as complete design, engineering and transportation, unloading, storage and site handling, installation and commissioning of all equipments and material, complete project management as well as civil works/construction related services for setting up of a functional solar power plant.
C. Accordingly, the contract entered into by t
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:
a. Whether contract for supply of/construction of a solar power plant wherein both goods and services are supplied can be construed to be a composite supply in terms of Section 2(30) of the Central Goods and Services Tax Act, 2017.
b. If yes, whether the principal supply in such case can be said to be of 'solar power generating system' which is taxable at 5% GST.
c. Whether benefit or concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors.
G. The Authority for Advance Ruling, Maharashtra (hereinafter referred to as 'the AAR') vide Advance Ruling No. GST-ARA-01/2017/B-01 dated 17 February, 2018. = 2018 (5) TMI 854 – AUTHORITY FOR ADVANCE RULING – MAHARASHTRA passed the following order:
a. The Contract for construction of SPGS wherein both goods and services are supplied is a 'works contract'.
b. Since the transaction is treated as works contract and not composite supply, there arises no question of determining what w
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nd wind operated electricity generator
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
As per the above, concessional rate of 5% has been provided to the following (when covered under heading 84, 85 or 94):
* PV modules
* Solar power generating system – This term has not been defined under GST. However, a reference can be made as per paragraph 1.2 below
* Parts for manufacture of solar power generating system and PV modules – There is no restriction provided on what would qualify as parts and in such case all goods which qualify as 'parts' of solar power generating system would be eligible for concessional rate of tax
1.2. Wide ambit of term 'solar power generating system' (“SPGS”)
1.2.1. The Appellant submits that the term 'solar power generating system' has not been defined under GST. Generally, solar power generating systems a
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all goods provided under the contract which help in end to end generation as well as transmission of electricity.
1.2.3. Furthermore, under erstwhile law also, solar power generating systems were not defined. However, under erstwhile excise law, various exemptions were extended to non-conventional energy devices which included solar power generating systems List 8 of Notification no. 12/2012-Central Excise, dated 17 March 2012 reproduced below for ease of reference:
'(1) Flat plate solar Collector (2) Black continuously plated solar selective coating sheets (in cut length or in coil) and fins and tubes (3) Concentrating and pipe type solar collector (4) Solar cooker (5) Solar water heater and system (6) Solar air heating system (7) Solar low pressure steam system (8) Solar stills and desalination system (9) Solar pump based on solar thermal and solar photovoltaic conversion (10) Solar power generating system (11) Solar photovoltaic module and panel for water pumping and other applica
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ther parts are only panel housing consisting of controllers and switches. Hence the whole system is a Solar Power Generating System and is entitled for the benefit of notification. Therefore, the denial of benefit of notification by the adjudicating authority is not sustainable. The impugned order is set aside and the appeals are allowed.'
Further, in the judgement of Bangalore Tribunal in the case of B.H.E.L. vs. Commissioner of Central Excise, Hyderabad = it was held that:
'In the present case, the appellants have claimed exemption in respect of “inverter charger card” as solar power generating system. The appellants actually manufactured SPV lantern. The above lantern required electricity for its It is possible to convert solar energy to electricity with the help of inverter charger manufactured by the appellants. The Dy. General Manager has certified that the inverter merger constitutes solar power generating system as it performs the function of generating the required hig
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t case being a composite supply of SPGS has been provided hereunder in detail.
1.3 Concept and taxability of composite supply
Concept under GST Laws:
1.3.1. The Appellant most humbly submits that, Section 2(30) of the Central Goods and Services Tax Act, 2017 defines composite supply to mean '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 ordinary course of business, one of which is a principal supply'.
Further, principal supply is defined in Section 2(90) of the CGST Act to mean 'the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary'. Thus, principal supply refers to the supply which is the predominant element in a composite supply.
In this regard, the GST law provides an illustra
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ble supplies should be supplied in conjunction with each other
d. One taxable supply should be a principal supply
In such case, the supply which is the principal supply is treated as the main supply and the entire transaction is taxed as per the principal supply.
Concept under erstwhile Service tax Laws:
1.3.2. The Appellant submits that the concept of composite supply under GST is identical to the concept of naturally bundled services prevailing in the erstwhile Service Tax regime.
Under Section 66F (3) of the Finance Act, 1994 ('the Finance Act') two rules have been prescribed for determining the taxability of such services. The rules prescribed are explained as under:
1. If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its 'essential character'
2. If various elements of a bundled service are not naturally bundled in the ordinary course of business, i
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element of provision of service and an element of transfer of title in goods in which various elements are so inextricably linked that they essentially form one composite transaction then the nature of such transaction would be determined by the application of the dominant nature test.
Further, the following was provided in the Education Guide:
'9.2.4 Manner of determining if the services are bundled in the ordinary course of business Whether services are bundled in the ordinary course of business would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators some of which are listed below –
* The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package could be treated as naturally bundled in the or
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tive but indicative of bundling of services in ordinary course of business are:
* There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use
* The elements are normally advertised as a package
* The different elements are not available separately.
* The different elements are integral to one overall supply – if one or more is removed, the nature of the supply would be affected.
Per the above, the following conclusions can be drawn:
* In case more than two supplies are supplied together wherein one of the supply is principal supply, the same would qualify as composite supply.
* Further, goods supplied under the composite supply are supplied in conjunction with each other. Also, such composite supply is supplied in the ordinary course of business.
* The composite supply would qualify as supply of the principal supply. Taxes would be applicable as on such principal supply.
It is worthwhile to note that the G
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to characterisation'. It was observed that while 'Supply' is defined broadly, it nevertheless invites a commonsense, practical approach to characterisation. An automobile has many parts which are fitted together to make a single vehicle. Although, for instance, the motor, or indeed the tyres, might be purchased separately there can be little doubt that the sale of the completed vehicle is a single supply. Like a motor vehicle, spectacles are customarily bought as a completed article and in such circumstances are treated as such by the purchaser. The fact that either the frame or the lenses may be purchased separately is not to the point. Similarly the fact that one component, the lenses, is GST-free or that one component is subject to a discount does not alter the characterisation.
* In the case of Saga Holidays, Stone J focused on the 'social and economic reality' of the supply and found that there was a single supply of accommodation and the adjuncts to that supply (including the u
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of composite supply under European Union Value Added Tax laws ('EU-VAT').
In the case of Card Protection Plan Ltd. Vs. C & E Commrs [1994] BVC 20, the ECJ held that 'a service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service supplied'.
Per the above principal, in the present case also, what the customer wishes or intends to obtain is the main supply of solar power generating system and services are only a means to enjoy the same and hence, services are incidental to the main supply of goods.
United Kingdom
Under the UK VAT laws, a multiple supply (also known as a combined or composite supply) involves the supply of a number of goods or services. The supplies may or may not be liable to the same VAT rate.
If a supply is seen as insignificant or incidental to the main supply, then for the purposes of VAT it is usually ignored – the liability is fixed by the VAT rate ap
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both, goods and services, the entire contract would qualify as composite supply of SPGS. It is further submitted that the supply of SPGS should form the principal supply and the entire contract should be taxed as supply of SPGS itself since service portion of the contract including civil works is only 6% and is only incidental to supply of goods. Therefore, principal supply in such case is provision of SPGS and hence, the entire contract (including the services portion) should be taxable at the rate of 5%.
It is further submitted that Ministry of New and Renewable Energy (hereinafter referred to as 'MNRE') in various instances has also approved entire BOQ consisting of various parts e.g. cables, module mounting structures, spares, transmission lines etc. as essential to solar power generating system and hence the concessions applicable have been extended to all goods to be used in solar power plant. Drawing a corollary, concessional rate of 5% should be applicable on all the goods ap
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ration of electricity. Hence, the entire contract (both goods and services) are bundled and linked wherein the main intent is provision of SPGS.
Further, the Appellant would like to make a reference to the Draft Contract for supply of 60Mw Solar Power Plant (hereinafter referred to as 'the Draft Contract'). Clause B and E of the Draft Contract reads thus:
'B. Owner has appointed the Contractor for supply of the Solar Power Plant which includes engineering, design, procurement, supply, development, testing and Commissioning of the Plant as per scope defined in relevant schedule of this Contract, as per Applicable Law and Technical Specifications'
E. The Owner has undertaken an independent due diligence of the Contractor and based on such due-diligence, agreed to award this Contract for the Supply of Equipment (which in common trade parlance, are supplied together for setting up of solar power generating plant) and performance of Works so as to complement such Supply naturally bundled
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ndertaken and provides that the Appellant would be responsible for supply of solar power generating system. Schedule I of the Draft Contract reads as under:
'The Contractor would be responsible for Supply of Equipment and undertake all necessary activities ancillary to such supplies (such as erection, civil work etc) to ensure complete supply of Solar Power Plant….'
In view of the aforesaid clauses, it is submitted that the said contract is entered into for supply of 'solar power generating system' which involves supply of equipment and undertaking certain services. Separate prices are specified for different equipment which are supplied under the agreement for commercial convenience such as movement of goods, claiming of payment or availing trade credit etc., however as a general trade practice all the equipment which are being supplied under the agreement are supplied together for setting up/supply of solar power generating system.
1.3.5. Additionally, the Appellant would like t
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nary course of business will depend on the facts of the case. If such (EPC contracts) supplies could be treated as 'composite supply' with supply of solar power generating systems as the principal supply, then such supplies may be eligible for 5% GST rate as a whole….'
Accordingly, in the instant case, the contract should qualify as a composite supply wherein the principal supply is of solar power generating system and hence, entire contract should be taxable at 5%.
1.3.6. In view of the above mentioned principles and submissions, the Appellant submits that the Draft Contract qualifies as a composite supply of SPGS, and hence should be taxable at the rate of 5%. The AAR in its order has completely disregarded the facts and the Appellant's submissions in the matter and has grossly erred in holding that the impugned Draft Contract relates to provision of both goods and services, which qualify to be works contract, as the SPGS once installed becomes permanent in nature and hence is an
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he intention of the parties involved in the contract to determine whether the parties intend to undertake works contract or supply of solar power plant and
(ii) whether the activities are undertaken on an immovable property for the contract to qualify as works contract.
Essence of the contract and intention of the parties involved in the contract is clearly to supply SPGS
2.2. The Appellant submits that the intention of the parties entering into the contract is to supply SPGS wherein the. Appellant undertakes end to end responsibility of supply of equipment for solar power plant including designing, engineering, supply, installation, testing and commissioning of the solar power plant. The relevant clauses of the Draft Contract which indicate the intention of the parties entering into the contract are reproduced below for ease of reference:
'B. Owner has appointed the Contractor for supply of the Solar Power Plant which includes engineering, design, procurement, supply, development
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ump sum price agreed between the parties and also does not in any manner dilute the responsibility of the contractor.'
Hence, as also discussed in point 1 above, it is amply clear that the intention of the parties is to supply/procure a completely functional SPGS, and the intention is not to undertake any activity which will create an 'immovable property'. The Appellant's detailed submissions in this regard are provided below.
The solar power generating system is movable in nature, and hence, is not an immovable property to qualify. as works contract
2.3 The Appellant submits the AAR has grossly misinterpreted the facts and Appellant's submissions in the instant case and has passed an order on a pre-meditated assumption that typically such contracts (as proposed to be entered into by the Appellant) qualify to be works contract. The Appellant would like to reiterate that the SPGS, as proposed to be supplied by the Appellant is not an immovable property, and hence, cannot qualify to b
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h goods, it could always remove it from the base and sell it. Relevant extract from the judgment is reproduced below for ease of reference:
'The Tribunal held that the machine was attached to earth for operational efficiency. The whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency and also for safety. The Tribunal further held that the paper making was saleable and observed “if somebody to purchase, the whole machinery could be dismantled and sold to him in parts”.
In view of this finding of fact, it is not possible to hold that the machinery assembled and erected by the appellant at its factory site was immovable property as something attached to earth like a building or a tree. The tribunal has pointed out that it was for the operational efficiency of the machine that it was attached to earth. If the appellant wanted to sell the paper making machine it could always remove it from its base
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d to be movable. Relevant extract of the judgement is reproduced as under for ease of reference:
'Applying the above tests to the case at hand, we have no difficulty in holding that the manufacture of the plants in question do not constitute annexation hence cannot be termed as immovable property for the following reasons:
(i) The plants in question are not per se immovable property.
(ii) Such plants cannot be said to be “attached to the earth” within the meaning of that expression as defined in Section 3 of the Transfer of Property Act.
(iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free.
(iv) The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed.'
In furtherance to the aforesaid judgment, the Madras High Court in the case of Board of Revenue, C
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, it is worthwhile to note that the Madras High Court in the matter of Sri Velayuthaswamy Spinning Mills v. The Inspector General of Registration and the Sub Registrar (2013 (2) CTC 551) = 2013 (3) TMI 681 – MADRAS HIGH COURT, while deciding whether setting up of windmills can be treated as movable property for the purpose of payment of stamp duty, held that windmills were installed on the cemented platform on the land for running of windmills and not for the benefit of the land, and hence the same are to be considered as movable property. The judgment was passed on the basis of the principle that if, in the nature of things, the property is a movable property and for its beneficial use or enjoyment, it is necessary to imbed it or fix it on earth though permanently that is, when it is in use, it should not be regarded as immovable property for that reason.
Similar principles were also adopted in the matter of Perumal Naicker v. T. Ramaswami Kone and Anr. (AIR 1969 Mad 346) = 1967 (9)
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In view of the aforesaid judgments, it is submitted that in the instant case, the solar power plants supplied by the Appellant is commissioned and installed only for the beneficial enjoyment and for the purposes of better functioning of the plant and are capable of being removed and transferred from one place to another. Hence, the fact that the plant is installed but not permanently affixed to the land means that the same is not an immovable property.
Further, the AAR nowhere distinguishes the above referred case of Sri Velayuthaswamy Spinning Mills v. The Inspector General of Registration and the Sub Registrar (2013 (2) CTC 551) = 2013 (3) TMI 681 – MADRAS HIGH COURT, wherein it was held that windmills qualify as movable property. The AAR in the Impugned Order held that if a thing is embedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, then it is part of the immovable property. If the attachment is made for
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e by the owner. Such costs incurred would be charged by the contractor from owner separately and does not form part of the Contract price highlighted in Schedule 3 of the contract. The amount to be charged due to the changes will be mutually decided between the parties.'
2.6. Further, the Impugned order is not in line with the MNRE vide which it has been clarified that structurals as such do not qualify as immovable property and hence are outside the domain of works contract. Even though the term 'structural' has not been defined under the Circular, a corollary can be drawn that the government acknowledges the fact that a certain level of construction related work is required in setting up of a solar power plant, however, the same would not change the nature of the contract to qualify as 'works contract'. Further, in the MNRE Circular, it has also been clarified that if the supplies under the contract can be treated as 'composite supply' with supply of solar power generating systems a
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ed at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items would not be considered as moveable and will, therefore, not be excisable goods.
(vi) If any goods installed at site (example paper making machine) are capable of being sold or shifted as such after removal from the base and without dismantling into its components/parts, the goods would be considered to be movable and thus excisable. The mere fact that the goods, though being capable of being sold or shifted without dismantling, are actually dismantled into their components/parts for ease of transportation etc., they will not cease to be dutiable merely because they are transported in dismantled condition. . ….. '
A conjoint reading of the above along with the judicial precedents, clearly demonstrates that the solar power plant once installed is capable of being moved from one place to another without substantial damage, the
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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.
3. The project would be using goods which would be imported. Are such high end equipments frequently dislocated? Would there not be damage to the materials if moved places frequently and if so, would it perform as effectively as it would have when without damage? The questions itself would give the answers.
4. The definition of the word 'Commissioning' as found in the agreement brings out the enormity of the scale of operations and how the transaction would fall in the scope of an immovable property –
Commissioning' permanent means the functional operation of plant (including each unit thereof), following the installation and energization of evacuation infrastructure to grid substation and installation and energization of the plant to the evacuation infrastructure, subsequently and the evacuation of power is possible from the plant to the g
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tion situated at and in the state of Karnataka, India
Thus, it can be seen that the plant would be connected to the grid substation for the purposes of the commercial operations. After having established and commissioned such a project which is connected to a grid substation, who would be taking the project to a different location. It would be farfetched an argument that the project could be shifted to a different location just to prove that the project is movable.
7. The owner has also to obtain approvals and permits (asper applicable law) required for commissioning and operation of the plant. Do such permits and documents have a frequent changeover in terms of the place, the owner and project name being constant? Such permission definitely have an element of permanency.
8. Under the clause about 'obligations of the contractor', we find that the contractor is responsible for the construction of civil structures or buildings as per Schedule 2. The construction of a civil structure i
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is only installed together to the grid sub-station so that the same is capable of functioning as a system together. It is further submitted that though SPGS may be shifted from one place to another only in rare circumstances, the same is still capable of being removed and hence cannot, by any stretch of imagination, be said to be an immovable property.
The AAR in the Impugned order has failed to explain as to why the installation and commissioning work involved in setting up of SPGS would qualify to be 'immovable property' '. On the contrary, the AAR has baselessly assumed that the SPGS has element of permanence and hence, is incapable of being removed. It is Appellant's submission that the installation and commissioning work done by the Appellant does not qualify as immovable property, as the same is capable of being moved.
Reliance in this regard is also placed on the judgement of the Delhi Tribunal in the case of I.G.E. (India) Ltd. Vs. CCE [1991 (53) ELT 461] = 1990 (12) TMI 209
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not immovable property.'
In view of the aforesaid, it is clear that even if it is necessary to fix something on earth permanently till it is in use, it cannot be said that it is an immovable property if the nature of the same is movable. Hence, relying on the aforesaid, it is submitted that SPGS is movable in nature and hence, does not qualify to be works contract.
Further, as discussed above, there are various judicial precedents which clearly lay down that even in case of dismantling of a property, if the damage is not substantial and the same can be moved, the said property cannot be held to be an immovable property. The AAR has clearly failed to appreciate the Appellant's submissions and has passed the Impugned order on baseless assumptions that the SPGS is set up through civil works and hence is an immovable property.
Further, the AAR has wrongly concluded on the basis of rulings that the solar power plant is an immovable property since it cannot be shifted without first disma
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ere attached to a concrete base just to prevent wobbling of the machine, it would be classified as immovable property. In it is submitted that AAR has grossly erred in relying on the decision of TTG Industries as the facts of the case are not applicable to the Appellant's case. The level of construction work in case of TTG (T.T.G. Industries Vs. CCE, Raipur [(2004) 4 SCC 751] = 2004 (5) TMI 77 – SUPREME COURT OF INDIA) is intense. The relevant extracts of the judgement which shows that the level of construction is intense is reproduced below:
'9. In their reply to the show cause, the respondents explained the processes involved, the manner in which the equipments were assembled and erected as also their specifications in terms of volume and weight. It was explained that the function of the drilling machine is to drill hole in the blast furnace to enable the molten steel to flow out of the blast furnace for collection in ladles for further processing. After the molten material is taken
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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 base plate on the said concrete platform by means of foundation bolts. The base plate is 80 mm mild sheet of about 5 feet diameter. It is welded to the columns which are similar to huge pillars. This fabrication activity takes place in the cast house floor at 25 feet above ground level. After welding the columns, the base plate has to be secured to the concrete platform. This is achieved by getting up a trolley way with high beams in an inclined posture so that base plate could be moved to the concrete platform and secured. The same trolley helps in the movement of various components to their determined position. The various components of the mudgun and drilling machine are mounted piece by piece on a metal frame, w
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achines were rightly held to be immovable property. However, the Appellant would like to draw the attention to the fact that the setting up of solar power plant does not require this degree of construction work.
In the case of solar power plant, 'commissioning' is done only for setting up various equipments which constitute a solar power generating system so that they become a system and function together. The construction work/civil work comprises only around 6% of the total contract value and hence it cannot be said to be substantial construction so as to classify the same as immovable property. In fact, it is submitted that in case of the Appellant, the civil work is only done in order to assemble all the parts of the SPGS together for better functioning of the plant. The level and intensity of construction work described in the aforesaid judgment cannot be equated with the present set of facts by any stretch of imagination. The AAR has again assumed that the term 'commissioning' b
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of dismantling the system from the permanent site would render the goods non- marketable and hence the goods cannot said to be immovable property.
In it is submitted that solar power generating system is capable of being moved from one place to another without substantial damage and hence cannot said to be immovable property. The fact that the solar power generating system is capable of being moved without substantial damage can also be substantiated with the help of the CEC.
2.12. It is further submitted that the AAR has distinguished the judgment of the Hon'ble Supreme Court in the matter of Commissioner of Central Excise v. Solid and Correct Engg Works & Ors.[(2010) 5 SCC 122] =2010 (4) TMI 15 – SUPREME COURT relied upon by the Appellant, and observed that the asphalt drum/hot mix plants were held to be movable property for the reason that the plant was not intended to be permanent at a given place and the plant can be moved and was indeed moved after the road construction
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n the instant case.
Reliance in this regard can also be placed on the judgement of the Hon'ble Supreme Court in the matter of Sirpur Paper Mills Ltd (supra) wherein in case of a paper making machine, it was held that merely because the machinery was attached to the earth for operational efficiency, it does not automatically become an immovable property. If the appellant wanted to sell such goods, it could always remove it from the base and sell it. Hence, in this case as well, there was no movement indeed, however, the machine was capable of being moved which was enough for the machine to not be an immovable property. The AAR has failed to appreciate the judicial pronouncements relied upon by the Appellant and, hence, the Impugned order should be set aside.
2.14. Further, the Appellant would like to submit that the government orders/permits/approvals etc., as mentioned by the AAR in the Impugned order, required to set up a SPGS plant, do not change the nature of the contract or the p
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. This is due to the fact that PV module is a packaged, connect assembly of typically photovoltaic solar cells, which constitute the photovoltaic array of a photovoltaic system that generates and supplies solar electricity. In other words PV modules are nothing but an assembly of solar cells that helps in converting solar power into electricity. The fact that solar PV modules constitutes 60-70% of the total contract can also be substantiated with the help of the Draft Contract which is reproduced below for the ease of reference:
'Both parties agree that of the total supplies, the most critical part of the Plant are the supply of the mounted PV Module which constitute 60%-70% of the total contract value. Further, it is also agreed that the Contractor is responsible for the whole of the contract that is for setting-up/ supply of the Plant.'
3.2. Hence, PV module is the most important component of solar power generating system and therefore, even if the contract is construed as a compos
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ncillary to such supplies (such as erection, civil work etc.) to ensure complete supply of solar power plant.
Both parties agree that of the total supplies, the most critical part of the Plant are the supply of the mounted PV module which constitutes 60%-70% of the total contract value. Further, it is also agreed that the Contractor is responsible for the whole of the contract that is for setting up/supply of the Plant.
For the purpose of the undertaking compliances under Laws constituted in India, the parties may agree to define prices of the equipment to be supplied as part of the contract. The same shall not in any manner exceed the lump sum price agreed between the parties and also does not in any manner dilute the responsibility of the Contractor…'
3.6. The Appellant would also like to highlight the definition of 'Major Equipment' as provided in Clause 1.1.67 of the Draft contract which provides:
'Major Equipment(s) means PV solar modules which is an assembly of solar cells
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and the appeals are allowed'.
3.8. In the present case, the intention of both the parties is to supply the whole of solar power generating system in totality which consists of various goods and services incidental to provision of such goods. What the customer wants is a functional solar power system and services such as erection, commissioning etc. are only a means to provide the main supply of the goods.
3.9. Basis the above submissions, it is clearly evident that the PV Modules qualifies as principal supply'. Hence the whole contract, even if construed as composite supply, should be liable to tax considering it to be supply of PV Modules, which is liable to GST at the rate of 5%.
4. WHETHER BENEFIT WOULD ALSO BE AVAILABLE TO SUB-CONTRACTOR
4.1. In certain cases, the contractor engages various sub-contractors (manufacturers/ supplies/ sub-contractors) who further supply the goods to such contractor or engage in provisioning of certain portion of the contract.
4.2. Further, there
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, misinterpretation of the facts and hence is incorrect and bad in law.
Hence, in view of the aforesaid submissions, the Appellant would like to reiterate that the AAR, in its order, has incorrectly assumed that the contracts which are in relation to supply of SPGS are generally in the nature of immovable property, and hence are works contract.
In this relation, the Appellant would like to conclude that as per the detailed submissions made by the Appellant above, the contract is for supply of SPGS which is movable in nature and hence, cannot qualify as immovable property. The said fact has also been made clear by the authorities through the MNRE Circular wherein it has been categorically stated that 'structurals' as such under SPGS contracts do not qualify as immovable property, which means that supply of SPGS is not works contract. Further, it has been stated therein that contracts for SPGS can qualify as composite supplies, wherein principal supply would be of SPGS, which is taxabl
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the principal supply can be said to be that of PV modules (forming 60-70% of the contract value and being the most critical component of a SPGS), which is taxable at the rate of 5%
In addition, the Appellant would like to reiterate that as submitted above, the benefit of concessional rate of tax should be eligible to sub-contractors as well.
In view of the above, the appellant prayed that
a. Set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling as prayed above;
b. Pass any such further or other order(s) as may be deemed fit and proper in facts and circumstances of the case.
Additional SUBMISSIONS:
ISSUE No. (i):
Relevant provisions:
5. At the outset, reference requires to be made to the charging provision under the Central Goods and Services Tax Act, 2017 (“CGST Act”), viz. Section 9.
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods
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change, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
….
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
8. In terms of Section 7:
* The concept of “supply” under Section 7(1)(a) takes in supply of goods for a consideration, or a supply of services for a consideration.
* Separately, as per Section 7(1)(d), Schedule Il to the CGST Act determines which activities as a supply of goods or a supply of services. Amongst the activities set out at Schedule Il is a composite supply of “works contract”, which is treated as a supply of service. The relevant entry is extracted below:
6. Composite supply
The following composite supplies shall be treated as a supply of services, namely:-
(a) works contract as defined in clause (119) of section 2; and
….
9. In terms of the applicable rates of GST, the rates for goods are prescribed vide
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Central Goods and Services Tax Act, 2017.
9
–
(xii) Construction services other than (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x)and (xi) above.
9
–
10. Section 8 of the CGST Act then prescribes the tax liability in case of inter alia a “composite supply”, as follows:
8. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:-
a) a 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
11. Relevant to the present matter, the definitions of the terms “composite supply”, “principal supply”, “goods”, “services” and “works contract” under Section 2 of the CGST Act, are also set out below:
(30) “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 con
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provement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
It is also important to note that Section 2, which is the definition section, commences with the words “unless the context otherwise requires”. Accordingly, a particular context may alter the definition of any particular term under Section 2.
View taken in the Impugned Order frustrates the intent of the Legislature and renders the entry for SPGS otiose:
12. Without prejudice to the foregoing, it is submitted that under Section 9(1), the Government is enabled to issue notifications prescribing the rate qua “goods”, “services” or “both”. In the present case, as per S. No. 234 of Notification 1/2017, the Government has chosen to tax solar products in a particular manner:
Devices and parts
Solar power generating system all at } 5%
Photo voltaic cells
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sm or interconnecting network”. Similarly, the system is defined in Chambers 20th Century Dictionary as “anything formed of parts placed together or adjusted into a regular and connected whole”.
* P. Ramanatha Aiyar's Advance Law Lexicon (5th Edition)
“System” means a set of inter-related or interacting elements
16. In terms of the aforesaid, given that S. No. 234 refers to the fully interconnected SPGS, the said entry refers to all of the parts/ components as well as the necessary services to achieve such interconnection.
17. Accordingly, the clear intention of the Legislature is that the “system” must be taxed at an aggregated level in whatever form it is, as a “system”, where all the value elements which comprise the “system” must be taxed at 5%. It is well settled that in interpreting and applying a statute, no position can be adopted which would frustrate the intent of the Legislature or defeat the object and purpose for which the provision was enacted, and a purposive inter
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as a “works contract” and taxed at 18% on the full value, will render the taxing entry of SPGS wholly otiose/ nugatory. As per the settled law, any such interpretation is always to be avoided (Oswal Agro Mills Ltd. vs. CCE [1993 (66) ELT 37 (SC)]; = 1993 (4) TMI 73 – SUPREME COURT OF INDIA, Akbar Badruddin Jiwani vs. CC [1990 (47) ELT 161 (SC)]). = 1990 (2) TMI 50 – SUPREME COURT OF INDIA.
20. In the present case, the clear intent of the Legislature/Government is to tax SPGS at 5% being a source of renewable energy. Accordingly, no such interpretation can be adopted which would defeat this intention and place all SPGS contracts under the 18% rate bracket. However, the view taken in the Impugned Order will ensure that the intent of the Government to tax the solar power generating system at 5% is bypassed, and that the said system suffers tax at 18%, contrary to the clearly stated and manifested intention of the Government.
Fundamental interpretational error in the Impugned Order:
21.
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works contract”, it would be taxable as a “works contract”. Since we have elaborately discussed and observed that the impugned transaction is a “works contract” u/s 2(119) of the GST Act, we need not even enter into the discussion as to whether the impugned transaction is a 'composite supply' u/s 2(3) of the GST Act. (refer Pg. 78 of the Appeal Memo).
22. It is submitted that the aforesaid findings under the Impugned Order are completely unsustainable and bad in law, as the same completely misread the provisions of:
(i) Schedule Il to the CGST Act pertaining to “works contract”; and
(ii) the rate prescription for “works contract” under Notification 11/2017. Both as per Schedule II and Notification 11/2017, the contract in question must first be a composite contract and then it is to be determined whether it is a “works contract” or not. Hence, the appropriate sequence would be:
(f) Whether the contract is a composite contract or not?
(g) If yes to (a), whether the contract is a
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d Engineer) which clearly states that the SPGS is “highly moveable” as it is capable of being dismantled and re-assembled at another location (refer Pg. 139 of the Appeal Memo). The said expert evidence has not been controverted in any manner, the expert has not been cross-examined and no contrary evidence has been brought on record as well. It is well settled that expert evidence can only be countered with expert evidence and a judicial/ quasi-judicial authority cannot substitute his own views for that of the expert (Inter Continental (India) vs. Union of India [2003 (154) ELT 37 (Guj) =2002 (2) TMI 129 – HIGH COURT OF GUJARAT AT AHMEDABAD] maintained in Union of India vs. Inter Continental (India) [2008 (226) ELT 16 (SC)] = 2008 (4) TMI 23 – SUPREME COURT; Abraham J. Thakaran vs. CCE, Cochin [2007 (210) ELT 112 (Tri-Bang)] = 2006 (10) TMI 51 – CESTAT,BANGALORE upheld in CCE vs. Innovative Foods Ltd. [2015 (236) ELT 20 (SC)]) = 2015 (12) TMI 665 – SUPREME COURT. Accordingly, the view
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uctural support, ensuring it is wobble-free etc.) or for the beneficial enjoyment of the immovable property (i.e. construction of a building/ structure to enjoy and utilize the land). In particular, it has been held that where the item can be dismantled and erected at another location without destroying or damaging the item, the said item would be movable and not immovable. Reliance in this regard is placed on the following:
* Sirpur Paper Mills vs. CCE, Hyderabad [1998 (1) SCC 400] = 1997 (12) TMI 109 – SUPREME COURT OF INDIA
* CCE vs. Solid and Correct Engg. Works & Ors. [2010 (175) ECR 8 (SC)] = 2010 (4) TMI 15 – SUPREME COURT
* Board of Revenue, Chepauk, Madras vs. K. Venkataswami Naidu [AIR 1955 Mad 620] = 1955 (3) TMI 46 – MADRAS HIGH COURT
* Sri Velayuthaswamy Spinning Mills vs. The Inspector General of Registration and the Sub Registrar [2013 (2) CTC 551] = 2013 (3) TMI 681 – MADRAS HIGH COURT
* Perumal Naicker vs. T. Ramaswami Kone and Anr. [AIR 1969 Mad 346] = 1967
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so submitted that the various precedents have not laid down a requirement that the item must be capable of being moved as such to another location without dismantling. The relevant judgements only contemplate that the item must be capable of being dismantled and reassembled at another location without being destroyed in the process. In this regard, the conclusion in the Impugned Order that the SPGS is “immovable property” as it could not be shifted without first dismantling it and the reerecting it at another site, is wholly erroneous, and contrary to the test established by the Hon'ble Apex Court.
(n) It is further submitted that the test is not one of whether the items are, in fact, dismantled and moved by an assessee, but whether they are capable of being dismantled and moved from one to another (refer Quality Steel Tubes (P) Ltd. vs. CCE, UP. [1995 (75) ELT 17 (SC)] = 1994 (12) TMI 75 – SUPREME COURT OF INDIA; Triveni Engineering & Indus Ltd. vs. CCE [2000 (120) ELT 273 (SC)]) = 2
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s not in the nature of “immovable property”, and, therefore, cannot qualify as a “works contract”. Consequently, the agreements cannot be taxed as a service at 18%.
Without prejudice, the transaction is in any event not a “works contract”, but is taxable per the principal supply, at a rate of 5%:
26. Without prejudice to the foregoing, a “works contract” will still not be constituted, as a “works contracts” by definition is a contract for construction which also involves a transfer of title/ ownership in goods. The predominant element is, therefore, that there must be a contract for rendition of services, viz. construction services. Accordingly, where the predominant element is supply of manufactured goods which are imported, or, locally procured, the definition of “works contract” will clearly not be satisfied.
27. Furthermore, works contract being a specie of composite contract (which determines taxability qua the principal supply), in order to be taxed as a service, it is a natur
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larification (largely in the context of solar projects and windmill projects), it is settled law that parts/ components of a system would equally merit the rate prescription for the “system”:
* Rajasthan Electronics & Instruments Ltd. vs. CCE, Jaipur [2005 (180) ELT 481 (Tri-Dei)] = 2004 (7) TMI 259 – CESTAT, NEW DELHI
* BHEL vs. CCE, Hyderabad [2008 (223) E.L.T. 609 (Tri. – Bang.)] = 2007 (10) TMI 165 – CESTAT, BANGALORE
* Phenix Construction Technology vs. CCE, Ahmedabad-II [2017-TlOL-3281-CESTAT-AHM] = 2017 (8) TMI 307 – CESTAT AHMEDABAD
* Jindal strips Ltd. vs. CC, Bombay [2002-TIOL-347-CESTAT-DEL-LB] = 1997 (5) TMI 152 – CEGAT, NEW DELHI
* Gemini Instratech Pvt. Ltd. vs. CCE, Nashik [2014 (300) EL T 446 (Tri-Mum)] = 2013 (7) TMI 464 – CESTAT MUMBAI
* Elecon Engineering co. Ltd. vs. CC [1998 (103) ELT 395 (Tri)] = 1998 (3) TMI 359 – CEGAT, MUMBAI
* Pushpam Forging vs. CCE, Raigad [2006 (193) ELT 334 (Tri-Mum)] = 2005 (7) TMI 242 – CESTAT, MUMBAI
* CCE vs. Megatech C
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503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517
4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
In terms of the af
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e appellants were heard on 02.07.2018 where the appellant reiterated the submission made in the application filed before the Advance Ruling Appellate Authority. The appellant also made additional written submissions on 02.07.2018 reiterating all the submissions made in the application and certain additional grounds also. Copy of the additional submission was enclosed to the appeal. Both the submissions of the appellant are -kept on record.
FINDINGS
We have heard both the parties and have gone through the entire case records and written and oral submissions made by the appellant as well as by the respondent. The main issue to be decided is (i) Whether contract for supply of/construction of a solar power plant, wherein both goods and services are supplied, can be construed to be a composite supply in terms of Section 2(30) of the Central Goods and Services Tax Act, 2017 as claimed by the appellant or the same is works contract services as per the ruling made by the AAR. The other two i
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33. The total scope of the contract is set out under schedule-I which says the following: ..”The contractor would be responsible for Supply of Equipment and undertake all necessary activities ancillary to such supplies (such as erection, civil work etc.) to ensure complete supply of Solar Power Plant. ”
34. As per Clause 4.2, which defines the 'Obligations of the Contractor', the contractor is required to do the following,-
i) Design and engineering of the plant as per Schedule-2 (Technical specification).
ii) Procure the equipment as per the Schedule-4 (Execution schedule).
iii) Construction of civil structure or building.
iv) Insurance required during the transportation of equipment, supplies by the contractor and insurance required for its representative, engineers and labors until commissioning.
v) Supply of such items and materials which are needed for installation, commissioning and normal operation of the plant…..
……………………..
vii) The Contractor is als
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sent at the Commissioning (“Notice of Commissioning”). In this regard, the following shall be the pre-requisites for achievement of Commissioning:
(a) successful installation, testing and Commissioning including generation of electrical energy and charging of 100% DC capacity of Relevant MW size of the Plant;
(b) the Plant is mechanically and electrically completed meeting minimum functional, technical and safety requirements;
(c) the data acquisition system has been commissioned and able to log data as required by the utility;
(d) that the Plant has been continuously running for a minimum period of 3days except for minor faults and Grid non- availability.
37. Let us also see the clause 20 about the Risks and liabilities.
20. RISKS AND LIABILITIES
20.1. The risk and liabilities pertaining to all the equipment provided and to the development, design, procurement, supply, development, construction, testing and commissioning of the Plant shall be borne by the Contractor till th
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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 ordinary course of business, one of which is a principal supply;
Illustration. – Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;
It is important to see the definition of 'principal supply' and goods along with the same.
“principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary;
A reading of the definition of 'composite supply' shows that there should be-
a. Two or more taxable supplies;
b. Of goods or services or both;
c. Or in combination thereof;
d. Which are naturally bundled and
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as a 'composite supply', the CBIC has published an e-flier on the subject. As per the e-filer, 'Composite supply' entails the concept of 'naturally bundled supply', and whether services are bundled in the ordinary course of business would depend upon the normal or frequent practice followed in the area of business. It also says that in order to qualify for a composite supply one of the characteristic would be that 'none of the individual constituents are able to provide the essential character of the service'. What is the normal frequent practice in the trade can be ascertained from the following indicators,
* The participation of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package, then such a package could be treated as naturally bundled in the ordinary course of business.
* Majority of service provider in a particular area of business provide similar bundled of services
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axable supplies- one of goods and the other of services and they both are naturally bundled and it is natural and also a practice to expect that the contractor who will supply the goods will also supply the services alongwith it. In the business of contracts for the Solar Power Generating System, it is a practice to provide a Plant as a whole along with the supply of services. We differ with the order of the Advance Ruling Authority in this respect.
42. WHETHER IMMOVEABLE PROPERTY
42.1 Now though we have come to the conclusion that the same is a composite supply, we have to decide the issue about what would be the principal supply and whether it would be a supply of services or supply of goods. The ARA has held that the impugned transaction for setting up and operation of a solar photovoltaic plant which is in the nature of a 'works contract' in terms of clause (119) of Section 2 of the GST Act, and hence, should be taxable at the rate of 18%. The moot question is therefore is whethe
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tion of the 'Solar Power Generating System' amounts to erection of immovable property? In order to answer this question, we have to go through the clauses given in the agreement brought before us.
42.2 It can be seen from the definition that 'Works Contract' involves activities of building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. However, these activities should be in terms of immovable property. In order to decide whether the transaction is a works contract it is for us to decide whether it is in terms of immovable property. The term 'immovable property' has not been defined under the GST Act. The appellant has submitted certain judgements in his favour and after going through them, we find that the following pri
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untry also.
* If the fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free then it cannot be called as 'Immoveable property'.
* If the setting up of the plant itself is not intended to be permanent at a given place and if the plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed, then also it cannot be termed as 'Immoveable property'.
42.3 So what to be seen above is that in deciding whether a property is movable property we have to see what is the mode of necessary annexation and the object of annexation. If object is so annexed that it cannot be removed without causing damage to the land then it gives a reasonable ground for holding that it was intended to be annexed in perpetuity. Also whether the intention of the parties while erecting the system was that the plant has to be moved from place to place in the near future would also make a differenc
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AC power, Switchgears, Transformers and transmission lines etc. The entire mechanism of a SPGS is that solar panels/PV modules are connected together to create a solar array. Multiple panels are connected together both in parallels and in series to achieve higher current and higher voltage. The electricity produced by solar array is direct current, and therefore, inverters are required to convert Direct Current into Alternating Current and connection to utility grid is made through High Voltage Transformer.
The appellant has submitted in the write up that in setting up of a solar power generation plant, the following steps are involved:
* Soil and Topo Survey
* Plant coordinate fixing, Boundary fencing and Plant layout
* T/L Survey, Piling, Building Construction
* Structure erection, inverter erection, equipment foundation
* Charging transmission, DC system erection, module mounting
* DC cabling
* Commissioning of the solar power plant.
As part of the services contract
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on that receives the ideal amount of daily sunlight and uses space effectively. Installing ground-mounted solar panels always starts with building a stable base. Traditional ground-mount systems, essentially all work the same-systems anchor to the ground and hold a large number of stacked panels, often two but sometimes three or four panels high. Two rails usually support each panel, whether oriented in landscape or portrait. The anchoring to the ground is the tough part of these installations, as there are many different types of foundations. If the soil is clear of debris, steel beams are driven into the ground and the racking system is attached to the beams. If ground conditions are not suited for smoothly driven beams, anchor systems may be used – helical piles, ground screws. These can take more time to install as they have to power through boulders and other large debris. It is usually a more complicated installation process than putting solar panels on a roof. When you have a ro
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solar power system for a home. What we have in the instance is a 'WHOLE SOLAR POWER GENERATION SYSTEM.' one look at the Agreements gives an idea of the scope of the work. The array of goods includes Solar PV Modules, inverters and Inverter Transformer, Tracker Components, Module Mounting Structure, Switchyard Supply, Transmission Line Supply, AC/DC Cables ,Chain Link Fencing ,Battery Charger, Power Transformer, LD Switchgear and complete switchyard, Inverter transformers and auxiliary transformers, Battery and battery charger, SCADA system, Module cleaning system, Illumination and ventilation system, Earthing system ,Site enabling facilities and Mandatory spares. The initial steps includes the drawings and detailing of the system.
* The activities given in Schedule-I (Scope of work) shows that the Obligation of the Contractor amongst other things includes Plant information and 'Plant Information' in turn includes works relating to 'Plant land' which in turn includes identification of
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laying down of the OHT line which includes line survey, procurement of materials and erection of poles.
* Item 10 of the Schedule-I shows that lot of approval and permissions are required not only for transportation of materials but also for payment of land related taxes, approval from local bodies, environmental clearance, NOC from utilities, final occupancy approval and commissioning certificate as well as their requisite approval from KPTCL and other government agencies. The above itself shows the huge work and detailing of the project.
* Clause 4.2 refers to the 'Obligation of Contractor'. The Obligation of the contractor include amongst other things design and engineering of the Plant, procurement of the equipment, construction of the civil structure or obtaining of the necessary approval for land labour etc.
* Clause 5 of the contract delineates the scope of designing and engineering. It details that the contractor shall design the Plant and also submit the drawing .1 layo
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ompleted meeting the functional, technical and safety requirement.
c) The data acquisition system has been commissioned.
d) The Plant has been continuously running for minimum period of 3 days.
* Clause 20 which refers to liabilities provided that all the risk and liabilities shall be borne by the Contractor till the completion of the Plant. It is only of the completion of the Plant that the risk and liabilities are shifted to the owner.
All of the above (quoted from the details given by the appellant) goes to show that the erection of the solar power generating system is not as simple or movable as it is made out to be. It is an entire system comprising a variety of different structures which are installed after a lot of prior work which involves detailed designing, ground work and soil survey. As said earlier, the amount of drawings done indicates the magnitude of the work done. Solar systems tend to be tailored specifically to fit the dimensions and orientation of the needs o
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mportant part of the system but what is intended to be bought is not the PV module but an entire system. Thus, we affirm the conclusion drawn by the ARA that the Agreements made lead to the erection of a Solar Power generating System.
42.7 We shall refer to certain judgements in this regard. The Advance Ruling Authority has referred to the Supreme Court judgement in the case of M/s. T.T.G. Industries Ltd., vs Collector Of Central Excise,. on 7 May, 2004 Appeal (civil) 10911 of 1996. = 2004 (5) TMI 77 – SUPREME COURT OF INDIA The contract here was for the design, supply, supervision of erection and commissioning of four sets of Hydraulic Mudguns and Tap Hole Drilling Machines required for blast furnace and the issue was whether the same is immoveable property. The Apex Court observed,”
…”Keeping in view the principles laid down in the judgments noticed above, and having regard to the facts of this case, we have no doubt in our mind that the mudguns and the drilling machines erected
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uns and the Drilling machines are mounted piece by piece on a metal frame, and the components are lifted by a crane and landed on a cast house floor 25 feet high. The volume and weight of these machines are such that there is nothing like assembling them at ground level and then lifting them to a height of 25 feet for taking to the case house floor and the to the platform over which it is mounted and erected. It observed that the machines cannot be lifted in an assembled condition and after taking note of these facts, it concluded that the same is immoveable property. The Court further held that it cannot be disputed that such Drilling Machine and Mudguns are not equipment which are usually shifted one place to another nor it is practicable to shift them frequently. The court also referred to its own judgments in the case of Quality Steel Tubes (P) Ltd. 75 ELT 17 (SC) = 1994 (12) TMI 75 – SUPREME COURT OF INDIA and Mittal Engineering Works (P) Ltd. 1996 (88) ELT 622 (SC) = 1996 (11) TM
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ere the SC had to decide whether the 'plant and machinery' in the fertilizer is goods' or 'immoveable property. The Apex Court held that the same is immoveable property and observed the following,”
…..”The question whether a machinery which is embedded in the earth is movable property or an immovable property, depends upon the facts and circumstances of each case. Primarily, the court will have to take into consideration the intention of the parties when it decided to embed the machinery whether such embedment was intended to be temporary or permanent. A careful perusal of the agreement of sale and the conveyance deed along with the attendant circumstances and taking into consideration the nature of machineries involved clearly shows that the machineries which have been embedded in the earth to constitute a fertiliser plant in the instant case, are definitely embedded permanently with a view to utilise the same as a fertiliser plant. The description of the machines as seen in the Sc
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hey say that the definition of Solar Power Plant – “mean 60MWAC/81MWDC Solar Power Plant to be Supplied, installed and Commissioned at the Plant Site by the Contractor, which is forming part of the solar power generating system”. The contract would be is to develop a 60 MWAC/81 MWDC solar power plant for onward sale of power to its consumers. It is a big project and has a permanent location. Such a plant would, therefore, have an inherent element of permanency. Further, here the output of the project i.e the power would be available to an identifiable segment of consumers. 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.
43. The appellant has produced a certificate from a Chartered Engineer stating that the 'Solar Power Plant is made of equipment which are largely moveable in nature, if required, the equipment can be moved from one land par
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denotes the understanding of the Ministry regarding the GST treatment for solar sector and cannot be taken as legal advice/opinion. The letter itself clarifies in the end that the same is not a legal advice or an opinion. The issue of classification or determination of the agreements have to be done with respect to the laws and relevant provisions.
43.2 The appellant has also produced order of the CBEC under Section 37B (Order No 58/1/2002 -CX dt 15.1.2002). The order gives directions as to what would be excisable goods and what are not (immoveable property). The clarification says in Para 5 (i) that 'Turnkey projects like Steel plants, Cement Plants, Power plants etc involving supply of large number of components , machinery, equipment, pipes and tubes etc for their assembly /installation/ erection/integration/inter-connectivity on foundation/civil structure etc at site will not be considered as excisable goods for imposition of central excise duty =the components would be dutiable i
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tem
Description of goods
234.
84, 85 or 94
Following renewable energy devices & parts for their manufacture
(a) Bio-gas plant
(b) Solar power based 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 above description in the notification shows the description of goods as 'Following renewable energy devices and parts for their manufacture'. The term 'devices' is very important here. A device means an object. The Oxford dictionary defines 'device' as 'an object or a piece of equipment that has been designed to do a particular job'. The 'solar power generating system' described in the entry is used in the sense of a device. Also, we have decided the instant case on the facts and circumstances of the case. After going throug
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The ARA has held that no details were brought before them and therefore in the absence of documents they have expressed their inability to deal with the question. As no fresh documents were produced before us and also there being no original ruling of the ARA, we hold that we will not deal with the question in the present proceedings.
44. JUDGEMENTS QUOTED BY THE APPELLANT
Apart from the judgements already discussed in the 'FINDINGS' part of this order, we also discuss here the other judgements quoted by the appellant.
* Rajasthan Construction- The judgement is given under the provisions of the Central Excise Law. Also, there was no case of any agreements made which had to be decided on the touchstone of law but a case of classification.
* Phenix Construction Technology vs. CCE, Ahmedabad-II [2017-TlOL-3281-CESTAT-AHM] = 2017 (8) TMI 307 – CESTAT AHMEDABAD The question here for consideration was whether the structures and parts of structures are parts of solar power plant and eli
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immoveable property. We have discussed in detail with reference to judgements and the principles enunciated therein as to how the 'Solar Power System' would be an immoveable property. Also, the facts in these cases are different. There is no case of a foundation in the instant case nor is there is any case of merely an engine/pump installed.
* Gemini Instratech Pvt. Ltd. Vs. Commissioner of Central Excise, Nashik [2014 (300) ELT 446 (Tri. – Mum) = 2013 (7) TMI 464 – CESTAT MUMBAI, Elecon Engineering Co. Ltd. Vs. Commissioner of Customs [1998 (103) ELT 395 (Tri)] = 1998 (3) TMI 359 – CEGAT, MUMBAI, In Pushpam Forging vs. CCE, Raigad [2006 (193) ELT 334 (Tri. – Mumbai)] = 2005 (7) TMI 242 – CESTAT, MUMBAI, CCE vs. Megatech Control Pvt. Ltd. [2002 (145) ELT 379 (Tri. Chennai) = 2002 (5) TMI 112 – CEGAT, CHENNAI, Ballarpur Industries (1995 (56) ECR 646) SC) = 1994 (12) TMI 156 – SUPREME COURT OF INDIA, Sealol Hindustan Ltd (1988 (17) ECR 186 (Bombay) = 1988 (3) TMI 74 – HIGH COURT OF JU
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IN RE: M/s. TATHAGAT HEART CARE CENTRE LLP,
IN RE: M/s. TATHAGAT HEART CARE CENTRE LLP,
GST
2018 (9) TMI 1340 – APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – 2018 (17) G. S. T. L. 365 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – AAAR
Dated:- 5-9-2018
KAR/AAAR/Appeal-01/2018
GST
SRI A.K. JYOTISHI, AND SRI SRIKAR M.S., MEMBER
PROCEEDINGS
(Under Section 101 of the Central Goods and Service Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017)
At the outset, we would like to make it clear that the provisions of both the CGST Act and the KGST Act are in pari materia and have the same provisions in like matters, and differ from each other only on a few specific provisions; therefore, unless a mention is particularly made to such a dissimilar provision, a reference to the CGST Act would also mean a reference to the corresponding similar provisions under the KGST Act.
The present appeal has been filed under section 100 of the Central Goods and Service Tax Act, 2017
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T is leviable on the rent payable by a hospital supplying lifesaving services (cardiology and emergency services).
3. It was decided by the Karnataka Advance Ruling Authority vide Ruling No. KSA ADRG 4/2018 dated 21st March 2018 = 2018 (5) TMI 1704 – AUTHORITY FOR ADVANCE RULING – KARNATAKA that GST is leviable on the rent paid / payable for premises taken on lease by the Applicant.
4. Aggrieved by the said ruling of the Authority (hereinafter referred to as 'impugned order'), the applicant has filed an appeal under section 100 of the CGST Act, 2017 / KGST Act, 2017 on the following grounds:
i. The Advance Ruling Authority has erred in holding that GST is leviable on the rent paid / payable on premises, taken on lease by the Applicant, under the facts of the case and has not considered grounds of appeal / statement of Applicant's interpretation of law or facts, as the case may be in right earnest thus violating the principals of natural justice.
ii. The Appellant is not required t
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08.2018 and was represented by Dr. Mahantesh Charantimat, Chairman and Managing Director of M/s. Tathagat Heart Care Centre LLP. During the hearing the authorized representative reiterated the grounds of appeal and also made written submissions wherein they drew attention to Rule 89(h) of KGST Act which says that invoice received and issued during the tax period in a case where the claim pertains to refund of any unutilized input tax credit under sub-section (3) of section 54 where the credit has accumulated on account of output supplies other than nil rated or fully exempted supplies.
6. He pleaded that the Hon'ble Appellate Authority for Advance Ruling should pass a ruling on the applicability of Rule 89 so that they can pursue the refund of input tax credit paid on rent taken on premises in the interest of natural justice.
DISCUSSION AND FINDINGS
7. The Appellant is running a Cardiology Specialized Hospital which provides healthcare services. The said hospital is run on the premi
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to the extent of GST paid/payable on rent of premises and hence the purpose of paying the GST on rent of premises does not serve any purpose. The Appellate Authority is required to pass a ruling on the applicability of Rule 89(h) of the KSGT Rules so that the Appellant can pursue the refund of input tax credit paid on the rent taken on the premises.
9. In terms of CGST Notification No 11/2017 – Central Tax (Rate) dated 28-06-2017 and KGST Notification (11/2017) No FD 48 CSL 2017 Bengaluru dated 29-06-2017, CST is leviable @ (CGST @ 9% + SGST @ 9%) on the rent paid / payable for premises taken on lease by the Appellant for running the hospital vide Sl.No.16 (Real Estate Services) of the said Notifications. The appellant has stated that the AAR has erred on this point. The plea made by the Appellant before us is that the input tax credit of the GST paid on the rent cannot be availed as credit by them since their output supply is not taxable and hence they should be allowed to get a ref
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or other similar arrangements in respect of immovable property. By virtue of these Notifications, services by way of renting of residential building for use of residence only is exempt from levy of GST vide Sl.No.12 of the said Notifications.
c) In terms of CGST Notification No 11/2017 – Central Tax (Rate) date 28-06-2017 and KGST Notification (11/2017) No FD 48 CSL 2017 Bengaluru dated 29-06-2017. GST is leviable @ 18% (CGST @ 9% + SGST @ 9%) on the rent paid / payable for premises taken on lease by the Applicant for running the hospital vide Sl.No.16 (Real Estate Services) of the said Notifications.
12. As regards the plea that this Authority is required to pass a ruling on para 8(b) and observe that these issues are outside the realm of our consideration. The scope of the Appellate Authority for Advance Ruling under section 101 of the Act is limited to passing such order, as it thinks fit, confirming or modifying the ruling appealed against or referred to. There was no question r
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In Re: M/s. Giriraj Renewables Private Ltd.
In Re: M/s. Giriraj Renewables Private Ltd.
GST
2018 (9) TMI 1341 – APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – 2018 (17) G. S. T. L. 156 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – AAAR
Dated:- 5-9-2018
KAR/AAAR/02/2018-19
GST
SHRI. A.K. JYOTISHI, AND SHRI. M.S. SRIKAR, MEMBER
Represented by: Sri. Mallaha Rao, Advocate
PROCEEDINGS
(Under Section 101 of the CGST Act, 2017 and the KGST Act, 2017)
At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act. 2017 and the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act, 2017 and KGST Act, 2017) 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 corresponding similar provisions under the KGST Act.
The present appeal has been filed under Section 100 of the CGST
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s, structures, inverter transformer etc.) as well as complete design, engineering and transportation, unloading, storage and site handling, installation and commissioning of all equipments and material, complete project management as well as civil works/ construction related services for setting up of a functional Solar Power Plant.
3. The contract entered into by the Appellant includes end to end activities i.e, supply of various goods and services intended for setting up, operation and maintenance Of a Solar Power Plant. There may be a single lump sum price for the entire contract for supply of both goods and services and payment terms may be defined depending on agreed milestones.
4. The appellant filed an application on 24.11.2017 before the Karnataka Authority for Advance Ruling under Section 97 of CGST/KGST read with Rule 104 of CGST/ KGST Rules, 2017 in form GST ARA-01, seeking a ruling on the following questions:
a. Whether supply of turnkey Engineering, Procurement & Constr
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ion lines as well as other ancillary parts/goods and services should be considered ag supply of SPGS; that if the contract qualifies as a 'composite supply' then the Same should be taxable at 5% as principal supply is the supply of Solar Power Generating Systems”.
6. Further, the appellant also submitted that the major component of Solar Power System is Solar Photovoltaic module (PV module) which comprises around 60-70% of the entire Solar Power Plant and the rest of the components are merely parts or sub-parts which are required for panel housing and setting up of the module such as controllers and switches; that the service portion of the contract is only 10-15% and balance is supply of goods -Which substantiates the fact that provision of services is incidental to supply of goods and hence, the supply of goods should form the principal supply and the entire contract should be taxed as supply of goods itself. They also submitted that they would be supplying the PV module which is th
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ed that the supplies made by them are to be used in SPGS.
8. Subsequently, the Karnataka Authority for Advance Ruling, vide Advance Ruling No KAR ADRG 01/2018 dated 21-03-2018 = 2018 (6) TMI 1127 – AUTHORITY ON ADVANCE RULINGS, KARNATAKA (hereinafter referred to as 'Impugned Order') made the following observations on a detailed examination of the draft contract:
As per clause D Of the contract, the equipment (PV module) is imported and directly transferred to the owner by way of High Sea Sale. The owner files the Bill of Entry with the Customs for clearance of the PV module. This indicates that the owner has procured the goods and made them available to the contractor. Further, as per clause 1.1.45 of the contract, “Free Issue Equipment” is defined as Photovoltaic Modules to be supplied by the owner to the contractor as free issue equipment at the plant site for the installation and commissioning of the solar power plant. Hence the major component (PV Module) said to be constituting
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e Authority held that since the main equipment i.e PV module is procured by the owner himself, it cannot be construed as a principal supply by the contractor (applicant)and hence the question is irrelevant.
On the question Whether the benefit of concessional rate of 5% on the Solar Power Generation System and parts thereof would also be available to the sub-contractors, the Authority held that the made by sub-contractor is an individual supply and thereby the appropriate rate of GST has to be applied depending on the specific nature of supply;
9. Being aggrieved by the above mentioned Ruling of the Authority (hereinafter referred to as 'Impugned Order'), an appeal was preferred before the Appellate Authority for Advance Ruling on 08-06-2018 on the following grounds:
i. The proposed transaction is for composite supply of solar power generating system as a whole and hence the rate of GST should be at GST. The appellant submits that the term 'Solar power generating system' has not been
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e main intent of the contract is provision of Solar Power Generating System as a whole which consists of various components such as PV module, structures, inverter transformers, cables, SCADA, transmission lines, etc. The contract also included services like civil installation and commissioning as well as construction which are incidental to provision of such goods and form an ancillary part of the contract, Reference is made to Schedule I of the draft contract which defines the scope of work to be executed by the Appellant. The said Schedule provides that the Appellant would be responsible for Supply of equipment and undertake all necessary activities ancillary to such supplies (such as erection, civil work, etc) to ensure complete supply of Solar power plant. Separate process are specified for different equipment which are supplied under the agreement for commercial convenience such as movement of goods, claiming of payment or availing trade credit, etc.
The appellant submitted that
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tract should be taxable at 5% GST.
iii. The Appellant submitted that in the impugned order, the AAR has held that merely because the PV module is supplied on HSS basis, the contract cannot qualify as composite supply of SPGS. They submitted that procurement of goods on High Sea Sales('HSS') basis does not change the nature of the contract. The intention of procuring the PV modules on HSS basis is for commercial convenience and in order to avail benefit of concessional customs duty as benefit of concessional rate of customs duty is only available to the owner. However, the risk and liabilities pertaining to all the equipment provided and to the development and design; procurement, supply, development, construction, testing and commissioning of the plant shall be borne by the Appellant till the completion of the plant.
Hence it cannot be said that the PV modules are being procured by the Project owner.
iv. The appellant submitted that in certain case, they engage various sub-contracto
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Was called for a personal hearing on 28.0812018 and was represented by Shri Mallaha Rao, Advocate. During the hearing the Advocate highlighted that the main intention of the parties to the contract was the Supply and setting up Of the Solar Power Generating Plant. He argued that the issue Whether the contract was to be considered as a 'composite supply' was misunderstood by the AAR merely on the grounds that the main equipment of the contract i.e. PV Module was imported and transferred on High Sea Sales basis to the owner who then supplied the PV module to the Appellant at the site. While admitting to the factual position of transfer of title of the PV module on High Sea Sales to the owner and later supplying it to the, Appellant under the Free Issue clause of the contract, he emphasised that this was done only for commercial reasons; that since the owner alone was eligible for customs duty exemptions, the import was done by the owner. However, the terms of the contract was such that t
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with the commitment for power supply under the agreement, the project owner enters into contract with the contractor by entering into EPC contract with the Appellant.
c. Thereupon, the Appellant places purchase orders on various vendors for supply of goods in order to execute the EPC contract entered into with the project owner.
d. Moreover, the Appellant also places purchase order with Foreign Vendors for supply on HSS basis to the project owner against HSS contract which is a sub set Off main EPC Contract entered into as referred to above.
e. In pursuance of the purchase orders from the Appellant, foreign vendors supply the goods to the Appellant
f. Thereafter, the Appellant sells those goods on HSS basis to the project owner against HSS contract which is a sub set of main EPC contract entered into as above.
12. Accordingly, the Appellant has made payments to the foreign vendors against the purchase orders. The project owner has made payment to the Appellant despite HSS transac
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d services in that regard in Order to complete the project. Further they submitted that even though certain goods are being supplied On High Sea Sale basis, the Same does not change the nature of the contract and obligation of the contractor to provide such goods to the owner; that the said goods transferred on HSS basis still form part of the contract and the risk and liabilities remain with the contractor and are passed on to the project owner only after completion of the project, that is supply of SPGS which includes supply of equipment and ancillary service like development, design, procurement, supply construction, testing and commissioning Of the plant etc. They relied on the Andhra Pradesh High Court decision in the case of M/s. Larsen & Toubro Ltd Vs. State of Andhra Pradesh reported in 2015-TIOL-3055-HC-AP-CT = 2015 (12) TMI 470 – ANDHRA PRADESH HIGH COURT, wherein the Hon'ble High Court observed that in cases Of turnkey contract; wherein both goods and services are provided,
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n application of the 'equivalence principle' also affirms that the intent of the Government was never to tax the entirety of the goods and services in relation to setting up an SPGS at a significantly higher rate of 18%. Furthers the clear intention of the Legislature is that the 'system' must be taxed at an aggregated level in whatever form it is, as a 'system', where all the value elements which comprise the 'system' must be taxed at 5%.
15. As regards the question whether the benefit would also be available to the subcontractor, they submitted that Notification no 01 /2017 Integrated Tax (Rate), which provides concessional rate on solar power generating system does not specify the persons who would be eligible for concessional rate of 5% i.e. developer, contractor or manufacturer/supplier/sub-contractor, Since the concessional rate Of 5% is provided to renewable energy products and parts thereof, the Same should be applicable to all suppliers providing such products as long as it c
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r hearing.
18. The Appellant has also sought for condonation of delay in filing this appeal on the grounds that the Appellate Authority was not constituted at the time when the date for filing this appeal was due and hence the delay was beyond their control. We note that the appeal in this case ought to have been filed by the 20th April 2018. However, the Appellate Authority for Advance Ruling was constituted under the KGST Act only on 25th April 2018. Hence we condone the delay in filing this appeal.
19. Coming to the matter at hand, we find that certain facts as observed by the AAR have not been disputed by the Appellant viz. The fact that the contract in question is an EPC contract for supply of Solar Power Generating System; that the contract involves both the supply of goods as well as the supply of services; that the major equipment as per-the contract is the Photovoltaic module which forms about 60-70% of the contract; that the said Photovoltaic module is purchased overseas an
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re transaction.
21. The definition of 'composite supply' as per Section of the CGST Act reads as under:
“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 ordinary course of business, one of which is a principal supply.
Whereas, Section 8 of the CGST Act states that the tax liability on a composite supply shall be determined in the following manner, namely:-
“a composite supply comprising two or more supplies, one of which is principal supply, shall be treated as a supply of such principal supply.”
Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is u composite supply and supply of goods is a principal supply;
In addition we also note that Section 2 (31) of the CGST Act 2017 has defined 'considera
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than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply;
(74) “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;
Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.
22. In the instant case there is no dispute that the contract in question involves a supply of both goods and services. However in order for the supply to be termed as a 'composite supply', what is required is t
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with its associated accessories, conductors, electrical cables, instruments, apparatus and other items /equipment required to be supplied by the Contractor for completing and integrating the SPP, as per the Technical Specification, excluding Free Issue Equipment(Emphasis supplied).
In terms of Para 1.1.45 “Free Issue Equipment” means Photovoltaic Modules to be supplied by the owner to the contractor, as a free issue equipment at the Plant Site for the installation and commissioning of the SPP. The obligations of the owner in terms of Para 4 of the contract include providing for insurance required for Free Issue Equipment, third party/public liability insurance and insurance required for its representative, engineers and labours until completion of its obligations under this contract- In terms of Para 9 of the contract, the owner agrees to provide Free Issue Material as agreed between the parties. The said material would be over and above the Plant being supplied by the Contractor und
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parts and components and services.
24. The first part of the supply is done by purchasing from a foreign supplier the PV module and transferring the title of the said PV module on High Sea Sales basis to the owner of the project. The Project owner clears the PV module through the Customs and makes available the same to the contractor (Appellant) without consideration to the project site. The Appellant have argued that the above modus is merely undertaken for commercial reasons since it is the project owner who is eligible for custom duty exemptions and therefore. the PV module although has been identified and arranged for purchase by the Appellant, the same has been actually procured and imported by the other contracting party. We find that the reason for this modus, though compelling is not the relevant to the issue at hand. What is relevant is that the Appellant having resorted to such a structuring, has the effect of making the supplies effected in this instance to have been effec
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ppellant for Setting up the Solar Power plant. This supply without consideration is not within the fold of the definition of 'supply' as stated in Section 7 of the CGST Act. Other than the exceptions spelt out in Schedule I, any supply without a consideration is not a 'supply' and hence does not attract GST. What crystallizes from the above is that, the Supply of the PV module which is the major component of the Contract is not coupled at all with the supply of the other parts of the Solar Power Plant and the services for setting up the Solar Power Plant. In fact, the supply of the PV module in the situation is separated both in time and intent and is distinct and never coupled with supply of other items/ services within the impugned contract (and Which, it is the responsibility of the owner to procure and make available to the contractor). The transaction of supply of PV module in itself is abstracted from the rest of the elements of the EPC contract. It is clearly c separate instance
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he contract is one for work and labour- The intention in the two different transactions is different- on the matter of PV module sold on high seas, it is sale; and thereafter Other transactions in goods and services are to follow.
27. Therefore, in view of the above, we find that the supply of PV module is a distinct transaction by itself and Cannot be said to be naturally bundled with the supply of the remaining parts required for setting up the Solar Power Plant. The contract itself makes it abundantly clear that the term “equipments” does not cover “free issue equipment”. Therefore, the Contract itself recognises the supply by the owner as a distinct transaction which is separate from the supply of the other equipments and components by the contractor. To this extent the AAR was right in the impugned order in holding that the concept of natural bundling does not apply to the instant envisaged supply of the PV module in terms of the draft contract in question.
28. Once the contract
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ble to be termed as a composite supply will be determined on the basis of the dominant nature of the supply. In other words, if the dominant nature of the remaining portion of the contract in question which is executed by the Appellant is principally a supply of services of design, erection, installation and commissioning, then the tax rate will the rate as applicable to the services if they form the principal supply of the remaining portion of the contract. It has never been contended before us that for the balance part of the supply under the contract in question, the goods element of What we agree to call a 'composite supply' are the predominant or principal component in the transaction. We modify the ruling of the Advance Authority in the-impugned order to the above extent. It is emphasised that the discussions and findings as detailed above are limited to the facts involved in the contract in question.
29. As regards the question whether the benefit of concessional rate of 5% GST
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components & parts of the Solar Power Plant and the supply of the services of Erection, Installation and Commissioning of the Solar Power Plant.
b) The supply of PV module is a distinct transaction from the supplies in contract in question as it is the owner whose responsibility it is to procure and supply the PV module. This PV module is to be supplied as free issue material over and above the plant being supplied by the contractor. The owner is responsible for transportation of the PV module from the point of origin till plant site and he bears the other risks and rewards of ownership. The PV module which is procured by the Project owner on High Sea Sale basis and imported by availing Customs duty exemptions and later supplied to the Appellant as a free issue for use in the setting up of the Solar Power Plant.
c) The supply of the remaining portion of the contract in question by the Appellant Which involves the supply of the balance components and parts of the Solar Power Plant and
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Prescription of Certain Procedure for Obtaining GSTIN by Certain Tax Payers
Prescription of Certain Procedure for Obtaining GSTIN by Certain Tax Payers
G.O. Ms. No. 186 Dated:- 5-9-2018 Telangana SGST
GST – States
Telangana SGST
Telangana SGST
GOVERNMENT OF TELANGANA
REVENUE DEPARTMENT
( CT-II)
Dated 05th September 2018
G.O. Ms. No. 186,- In exercise of the powers conferred by section 148 of the Telangana Goods and Services Tax Act, 2017 (Act. No. 23 of 2017), the State Government, on the recommendations of the Council, hereby specifies the persons who did not file the complete FORM GST REG- 26 of the Telangana Goods and Services Tax Rules, 2017 but received only a Provisional Identification Number (PID) (hereinafter referred to as “such taxpayers”) till the 31st December, 2017 may now apply for
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urisdiction of Officer who is sending the request
(ii) On receipt of an e-mail from the Goods and Services Tax Network (GSTN), such taxpayers should apply for registration by logging onto https://www.gst.gov.in/) in the “Services” tab and filling up the application in FORM GST REG-01 of the Telangana Goods and Services Tax Rules, 2017:-
(iii) After due approval of the application by the proper officer, such taxpayers will receive an email om GSTN mentioning the Application Reference Number (ARN), a new GSTIN and a newaccess token.
(iv) Upon receipt, such taxpayers are required to furnish the following details to GSTN by email, on or before the 30th September, 2018, to migration@gstn.org.in:-
(a) New GSTIN;
(b) Access Token for new GSTI
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KANIYAMPARAMBIL STEELS Versus THE ASSISTANT STATE TAX OFFICE, THE STATE TAX OFFICER, PERUMBAVOOR, THE COMMISSIONER OF STATE TAX, THIRUVANANTHAPURAM, THE UNION OF INDIA, NEW DELHI AND THE BRANCH MANAGER, KADUTHURUTHY
KANIYAMPARAMBIL STEELS Versus THE ASSISTANT STATE TAX OFFICE, THE STATE TAX OFFICER, PERUMBAVOOR, THE COMMISSIONER OF STATE TAX, THIRUVANANTHAPURAM, THE UNION OF INDIA, NEW DELHI AND THE BRANCH MANAGER, KADUTHURUTHY
GST
2018 (10) TMI 1518 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 5-9-2018
RP. No. 703 of 2018 IN WP (C). 13980/2018
GST
MR DAMA SESHADRI NAIDU, J.
For The Petitioner : Adv. Aji V. Dev
ORDER
This Court on 19th July 2018 disposed of WP(C) No.13980 of 2018 with the following direction:
“In the light of the Division Bench's decision in W.A. No. 1802 of 2017, I dispose of the writ petition, directing the competent authority to complete the adjudication under Section 129 of the CGST Act,
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amus or any other writ or order or direction staying any step to invoke Ext.P4 bank guarantee pursuant to Exhibit P7 proceedings until filing an appeal under the CGST/SGST Acts.
4. Now the petitioner's counsel contends that pending this review petition, the petitioner has already filed a statutory appeal. It will suffice if this Court recalls its judgment under review and dispose of the writ petition with a direction to the respondent authorities not to encash the Bank guarantee until the statutory appeal is disposed of.
5. The learned Government Pleader, too, has submitted that the respondent authorities will keep the Bank guarantee intact until the petitioner's appeal is disposed of.
6. I, therefore, recall the judgment dated
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M/s. A.M.S. ENTERPRISES Versus COMMISSIONER OF CENTRAL SERVICE TAX, CHENNAI [PRESENTLY KNOWN AS “THE COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE”]
M/s. A.M.S. ENTERPRISES Versus COMMISSIONER OF CENTRAL SERVICE TAX, CHENNAI [PRESENTLY KNOWN AS “THE COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE”]
Service Tax
2018 (11) TMI 1221 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 5-9-2018
ST/MISC/4111/2017 and ST/561/2011 – FINAL ORDER NO. 42344/2018
Service Tax
Smt. Sulekha Beevi C.S, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
For the Appellant Shri J. Shankar Raman, Adv.
For the Respondent Ms. T. Usha Devi, DC (AR)
ORDER
Per Bench:
The appellants are a partnership concern engaged in the business of Man-power Supply Service to various corporate customers. On gathering intelligence, that they are evading payment of service tax, the officers of DGCEI, took up investigation. On verification of records, it was noticed that the appellants collected service tax on Man-power Supply Service but failed to remit the same to Government account. Accordingly, show-cause
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alleging suppression of facts with intent to evade payment of tax for the period from 16.06.2005 to 31.03.2008. Further that the appellants were under confusion as to whether the amount of salary, ESI, PF etc., to be paid to the workers are subject to levy of service tax. On belief, that the demand raised including these amounts in the total taxable value is not subject to levy of tax, the appellants had contested the demand. They had also contested the demand on limitation before the authorities below. However, the Commissioner confirmed the demand and imposed equal penalty under section 78 of the Finance Act, 1994. Since there was a letter received by appellants to the DGCEI officials on 15.09.2006 submitting the necessary documents, the appellant's activity was well within the knowledge of the officials at least from 15.09.2006 onwards. Hence, during the period from 15.09.2006 to 31.03.2008 the extended period cannot be invoked. To support this contention, he placed reliance on
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axes from their client etc. The details along with such letter pertain to earlier period i.e., 2003-04 and 2004-05. For the subsequent period, the appellants have not filed periodical returns. The appellants have filed details of charges collected on 29.07.2008 and 06.11.2008. They requested for further time vide letter date 17.02.2009. The said letter having been given to DGCEI during the investigation proceedings, it cannot be said that the department was put to knowledge and, therefore, there is no suppression on the part of appellants. The extended period invoked as well as penalty imposed are correct and proper.
4. Heard both sides.
5. The learned counsel has contested only on the ground of limitation and the penalties imposed. To support the ground of limitation, he has relied upon the letter dated 15.09.2006 issued by the appellants to DGCEI. The said letter is seen at page 143 of appeal paper book. On perusal of the said letter, it is very much clear that the appellants have
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endered by them under Man-power Supply service, the invocation of extended period after 15.09.2006 cannot sustain. In identical set of facts, the Hon'ble Jurisdictional High Court in the case of M/s. V.N.K. Menon & Co., Vs CESTAT, Chennai reported in 2015 (323) E.L.T.524 (Mad.) has upheld the decision of Tribunal which set aside the demand after the date when department came to know about the details. The relevant portion is reproduced as under:
“8. On a careful consideration of the entire gamut of facts, the answer to the question of law raised by the assessee is found in Para-2 of the order of the Tribunal itself. It has been held by the Tribunal that there is a clear case of suppression for invocation of extended period of limitation for the period prior to August, 1996, as the activities of the appellant/assessee came to light subsequent to an investigation by the Department. However, insofar as the period post August, 1996, on the plea of suppression, the Tribunal was correct
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warranting interference with the well considered finding of the Tribunal.”
6. From the above discussions, we are of the considered opinion that the demand for the period 15.09.2006 to 31.03.2008 cannot sustain and requires to be set aside, which we hereby do. The appeal partly succeeds on the ground of limitation. However, we find that the ingredients of suppression are very much present prior to 15.09.2006. Only pursuant to the investigation conducted not only with appellants but also with many of their clients like M/s. SPIC, M/s. Raddison GRT, M/s. Aircel, etc., did the fact of collection of service tax and the evasion come to light. Discernible, these facts were suppressed from the Department till the investigation. This being so, not only is the extended period invocable up to 15.09.2006 and demand in Annexure-A of the notice sustainable with interest up to that date but the penalty equal to the amount of such revised tax liability is also imposable. No interference is also calle
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In Re : G.N. Chemicals
In Re : G.N. Chemicals
GST
2018 (12) TMI 142 – AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – 2018 (18) G. S. T. L. 825 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – AAR
Dated:- 5-9-2018
STC/AAR/04/2018
GST
Shri S.K. Buxy and Rajesh Kumar Singh, Members
ORDER
Proceedings : The applicant M/s G.N. Chemicals, 27/13, Nehru Nagar-West, Bhilai, (C.G.) GSTIN 22AAFFG5162J1ZJ has filed the application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 requesting advance ruling as regards levy of GST Rate applicable in case of “Neem Seed”, classified under HSN Code 1211, placed both under 0% GST Rate and 5% CST Rate, on the condition that “All goods of seed quality” are classifiable under 0% GST Rate, whereas “All goods other than Seed quality” shall be classified under 5% GST Rate. The applicant is of the opinion that Neem Seed is classifiable under 0% GST Rate.
2. Facts of the case :-
I. M/s G.N. Chemicals, 27/13, Nehru Nagar-West, Bhilai,
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ommodities for Customs and Central Excise, and now for GST classification as well.
Neem Seed is categorized under HSN Code 12119014 under Indian Trade Classification (HS) – 2017.
Description of the Chapter 12 of ITC – HS Code reads as below : –
“OIL SEEDS AND OLEAGINOUS FRUITS; MISCELLANEOUS GRAINS, SEEDS AND FRLIIT; INDUSTRIAL OR MEDICINAL PLANTS; STRAW AND FODDER”
(iii) that, on carefully reading the Chapter description the apt placement of semi-colons and commas amply explains the types of goods & application of such goods covered by this classification under chapter 12 and the same is as below :-
Type
Meaning
Oil Seed
Seed that yields Oil
Oleaginous Fruit
Oily, or Rich in Oil, or Covered with Oil, or Producing Oil
An oleaginous fruit is the part of a plant that is used to produce oil. It can be a fruit (for example olives), seed (for example sesame) or nut (for example walnuts)
Grains
Grain is a cereal crop that has been harvested and is used for food.
Seed
the
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sowing, they would have placed Neem seed in HSN code 1209 (which is placed in Nil Rate classification), however, they have placed neem seed in HSN Code 1211 – the Heading title of which explicitly confirms the application of seeds to be not just for sowing purpose.
(vi) thus, Neem Seed is to be classified under 12119014 irrespective of whether Neem Seed is used for sowing or for Industrial of medicinal purpose.
(vii) Now HSN Code 1211 is placed under Nil GST Rate category as well as 5% GST Rate category with the distinction as below :-
Chapter 12
All goods of Seed quality
All goods other than seed quality
Neem Seed
1211
1211
CST Rate
0%
5%
“The titles of section and chapter are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the heading and any relative section or chapter notes and, provided such heading or notes do not otherwise require, according to the provisions hereinafter contained.&#
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he applicable general interpretational rules have been humbly submitted. Therefore it was their contention that Neem Seed (in all forms) to be classified under 0% GST Tax slab.
5. Thus we find that M/s. G.N. Chemicals, 27/13 Nehru Nagar West, Bhilai, (C.G,) 490020, GSTIN 22AAFFG5162J1ZJ, the applicant is seeking clarity as regards the applicable rates for payment of GST on the aforesaid commodity that is Neem Seed, viz. whether the applicable rates should be @ 0% or 5%.
6. The legal position, Analysis and Discussion :-
6.1 The provisions for implementing the CGST Act and CGGST Act, 2017 are similar. Now we sequentially discuss the provisions that are applicable in the present case.
6.2 The following facts have been mentioned in the report received from the jurisdictional Office of the applicant i.e. O/o Assistant Commissioner, Circle-2 Durg, with regard to the advance ruling application filed by the applicant :-
This report is with reference to the applicat
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Ayurveda practitioners to be anthelmintic, antifungal, antidiabetic, antibacterial, anti viral, contraceptive and sedative. Neem is a key ingredient in Non-Pesticidal Management (NPM), providing a natural alternative to synthetic pesticides.
It goes beyond doubt that Neem is widely used in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose. Therefore it falls in HSN Code 1211 which contains “Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered” and the rate of tax on items falling under this heading is 5% that is 2.5% CGST 2.5% SGST.
However, there are two entries in HSN code 1211, one is of 0% GST and another is of 5% GST. Both of these entries are extracted here for the sake of making matter more clear. These are as follows :
HSN
DESCRIPTION
RATE OF TAX
1211
Plants and parts of plants (
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ative term and means the degree of excellence when compared to an acceptable standard. The seeds having required standards of purity, germination and other attributes are referred to as quality seeds- Thus this chapter itself makes a very wide distinction at the outset between seeds per se and seed quality at the outset.
The applicant's other queries are about rate of tax on organic manure made up of Neem cannot be answered here due to lack of disclosure of procedure involved in making of manure. Unless it is determined that the manure made by the applicant is organic, it's needless to give opinion on it.
6.3 To sum up in the opinion of jurisdictional officer following would be the answer of the applicant's queries :-
(i) Trading of Neem Seed in “fresh or chilled” form would attract 0% of GST, whereas when traded as “frozen or dried” form would attract 5% GST.
(ii) Trading of Neem Seed powder would also attract 5% of GST.
(iii) Neem oil ex
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wing) includes all types of Neem Seed, whether for sowing or other uses and should be approved under tax free category.
6.6 The applicant has not come up with any evidence or logical explanation to substantiate their above contention. It has been unambiguously clarified in each entry mentioned in the schedules, issued under State and Central GST Acts as regard the applicable tax rate on any goods/ service along with the conditions and circumstances under which such goods/service shall be classified as tax free or taxable under specific tax slab. The following two pre-conditions need fulfillment for categorizing the neem seed so supplied by the applicant as tax free, as stipulated under HSN code 1211 –
HSN
DESCRIPTION
RATE OF TAX
1211
Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered.
CGST 2.5%
SGST 2.5%
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on 5 to Section 9 clearly stipulate the provisions for authentication of seed quality on the basis of which any seed would be defined as 'tax free seed for sowing.'
6.8 Seeds are the foundation of agriculture. Seed quality plays an important role in the production of agronomic and horticultural crops. Characteristics such as trueness to variety, germination percentage, purity, vigour, and appearance are important to farmers planting crops. Seed quality is the degree of excellence in regard to the characteristics referred to above that determines the seed quality. If the seed lot possesses high genetic purity and high germination percentage and is inter alia free from diseases, it is categorized as possessing high quality. Generally the standards fixed for certified seeds are considered of having quality standards. It implies that if a seed lot meets the certification standards, it is a good quality seed and if does not meet the certification standards, it is obviously not of s
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etch of imagination be categorized as those attracting tax @ 0%.
6.10 The applicant during the course of hearing stated that they would make neem oil from the kernel of neem which they would acquire from the collection of dry neem fruits or purchase of the same and they would also sell organic manure made from the De-Oiled Cake and husk of Neem. This clearly goes on to establish that the said goods to be supplied by the applicant does not fulfill the conditions mentioned under HSN code 1209 and 1211 neither in the 'specific form' nor 'specific use', as stipulated under GST Act to be categorized as attracting tax @ 0%.
7. In view of the deliberations and discussions as above, we pass the following order :-
ORDER
8. The ruling so sought by the Applicant is accordingly answered as under :-
In terms of Notification No. 1/2017-State Tax (Rate) No. F-10-43/2017/CT/V(69), Naya Raipur, Dated 28-6-2017, Serial No. 73, Chapter 1211 :
(i) Supply of neem seeds in froze
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In Re: M/s. Asahi Kasei India Private Limited
In Re: M/s. Asahi Kasei India Private Limited
GST
2019 (1) TMI 1091 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA – 2019 (21) G. S. T. L. 243 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA – AAR
Dated:- 5-9-2018
GST-ARA-35/2018-19/B-108
GST
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 Asahi Kasei India Private Limited, the applicant, seeking an advance ruling in respect of the following ISSUE. .
1. Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of “Support services” falling under HSN code 9985 “Intermediary service” classifiable under HS
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ssions, as reproduced verbatim, could be seen thus-
STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTIONS:
Asahi Kasei India Private Limited (hereinafter referred to as the “Applicant”) is a company incorporated in India in August 2012. The Applicant is a subsidiary of Asahi Kasei Corporation, Japan (“Asahi Japan”).
Asahi Japan is the flagship company of the Asahi Kasei group. Asahi Kasei group S fibers and textiles, petrochemicals, pharmaceuticals, polymers, electronic devices, home products, construction materials, health care etc.
The Applicant provides sales promotion and marketing support to Asahi Kasei group. For this, the Applicant has entered in to a Services Agreement dated 01 March 2013 with Asahi Japan and Marketing Services Agreement with various group companies of Asahi Kasei group. The scope of work under the Agreement is broadly stated below:
a. Collecting and analyzing information i.e. market analysis and supporting Asahi Kasei group in getting new busi
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cated Products Division (Asaclean) of Asahi Kasei Chemicals Corporation [dated 01 October 2013] as amended vide agreement dated 01 July 2016: (modified 5th January 2017 and taken over by Asahi Kasei Corporation, Japan)
d. Agreement with Asahi Kasei Plastics North America Inc. [dated 02 January 2014];
e. Agreement with Asahi Kasei Home Products Corporation [dated 01 April 2015];
f. Agreement with Bemberg Division of Asahi Kasei Fibers Corporation (dated 01 May 2015]; (modified 5th January 2017 and taken over by Asahi Kasei Corporation, Japan)
STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE QUESTIONS RAISED
Question on which advance ruling is required
Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of “Support services” falling under HSN code 9985 “Intermediary service” classifiable under HSN code 9961 /9962?
Statement of facts having a bearing on the question
The scope of the services provid
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ndia or any other mutually agreed territory) as Party A may from time to time request. In the event Party A should require more detailed information than that so provided by Party B, Party B shall exert its best efforts to obtain such further or more detailed information.
6. At such time and from time to time, as and when representatives of Party A, or its related business circles or customers visit the Territory and Party A so requests, Party B shall provide necessary assistance in business activities (including interpreting) to such representatives.
7. From time to time, as and clean requested by Party A, Party B shall make market surveys of the Products in the Territory and report the results thereof to Party A.
8. Party B shall perform services, as directed by Party A, resulting from the assignments pursuant to paragraph 4 through 7 of this Agreement, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters.”
As per Clause 9
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s entered either by local agent or by Asahi Japan or other overseas group company directly.
In fulfilment of its obligation, the Applicant has undertaken following activities:
(i) Providing reports on the condition of the economy and undertaking market survey
(ii) Visit to existing and perspective customers to understand their requirement, their business plan and their feedback and reporting to Asahi Japan
(iii) Providing information on the products of Asahi Japan to the existing and perspective customers
(iv) Generating marketing leads and relaying to Asahi Japan
(v) Helping customer on the product trial
(vi) Facilitating meeting between customers and agent Asahi Japan
Statement containing the applicant's interpretation of law
1. There are two possible classifications for the services supplied by the Applicant. The relevant HSN codes along with its description are tabulated hereunder:
SR.NO.
HSN CODE
TARIFF ENTRY
i.
9961 / 9962
Intermediary service – Services in w
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son. In order to examine this limb, it would be apt to refer to the dictionary definitions of the terms “broker” and “agent”. The relevant extract of the various dictionary definitions are as follows:
a. Broker
i. Halsbury[s Laws of England, 4th Edition, Volume 1, Para 712, Page 424: – A mercantile agent who in the ordinary course of his business is employed to make contracts for the purchase or sale of property or goods of which he is not entrusted with the possession or documents of title [Alapati Ramamurthi, Gelli Krishnamurthy & Co. Vs. J. Ramanujan and Ors. (ALR 1961 AP 408) = 1960 (7) TMI 66 – ANDHRA PRADESH HIGH COURT].
ii. K J Aiyar's Judicial Dictionary: – Word meaning an agent but used generally in a more special sense for one Who buys or sells on behalf of another. He must act according to the instructions given to him and as a general rule, his task is finished when he has made a contract between a buyer and the seller… Brokers are remunerated by commission known as br
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h a manner as to put those who employ him in a condition to treat together personally;
(2) and more commonly an agent employed by one party only to make a binding contract with another.
b. Agent
i. Shorter Oxford English Dictionary (Deluxe Edition): A person who acts for another un business, politics, etc.;
ii. Section 182 of the Indian Contract Act 1872: – An “Agent” is a person employed to do any act for another or to represent another in dealings with third persons;
iii. Concise Law Dictionary (2008 Edition): – An agent acts on behalf of his principal and often uses is name and his acts in that capacity are attributable to the principal;
5. Having understood the meaning of the terms '”broker” and an “agent”, it would be imperative to examine the scope of the term ll any other person, by whatever name called”. In this regard, it is humbly submitted that the scope of this phrase is restricted by the preceding words “broker or agent” by applying the principle of “Ejusdem Generis
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e Delhi High Court decision in the case of Areva T & D India Ltd. Vs. DCIT [2012-TIOL-234-HC-DEL-IT) = 2012 (4) TMI 79 – DELHI HIGH COURT wherein the Hon'ble High Court applied the principle of ejusdem generis to interpret the expression “business or commercial rights of similar nature” referred to in section 32(1)(ii) of the Act and held that the Legislature did not intend to provide for depreciation only in respect of specified intangible assets but also to other categories of intangible assets, which were neither feasible nor possible to exhaustively enumerate.
The principle of ejusdem generis was also upheld by the Apex Court in the case of Assistant Collector of C.Ex. Vs. Ramdev Tobacco Company (1991 (51) ELT 631 (SC)] = 1991 (1) TMI 136 – SUPREME COURT OF INDIA and CCE Vs. Shital International [MANU/SC/0884/2010) = 2010 (10) TMI 19 – SUPREME COURT OF INDIA. Similar view has been affirmed in the following cases:
i. CIT vs. Rani Tara Devi [2013 (355) ITR 457 = 2013 (3) TMI
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y of selling of goods.
11, The Applicant submits that the dictionary meaning of facilitation is to make easy or easier, make something possible or aiding or helping. Thus, the dictionary meaning of facilitation is very wide and covers processing, storage, transport, advertising, sales promotion etc, all activities as each and every activity aids or smoothens supply of goods. Goods Transport service (9965), Transport support service (9967), advertising and market research service (9983) are separate service classification. If such a wide meaning is adopted, it will render many of these PP service classifications redundant. Thus, the Applicant submits that facilitate supply of goods refers to an activity directly related to the sale.
12. In the instant case, the Applicant and the Service recipient are acting as independent contractors. Moreover, the Applicant and the service recipient have no authority to create nor do they assume any obligation on behalf of each other. The point of di
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“Independent contractor' which has been defined in the Concise Law Dictionary as follows:
“One who, exercising an independent employment, contracts to do a piece of work according to his own methods, and without being subject to his employer's control, except as to the result of the work.
An independent contractor is one Who undertakes to produce a given result but so that in the execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand.”
15. As highlighted above, the Services Agreement specifically provides a clause that the Parties do not intend to create any principal-agent relationship, Further, the consideration charged by the Applicant is not qua a particular transaction between the service recipients and their customers. Therefore, the services supplied by the Applicant to the service recipients fails to comply with the second limb of the definition of the term “intermediary”
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or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply”
b. It is pertinent to note that the definition of intermediary under Section 2(13) of the IGST Act is pari materia to the definition provided under the Finance Act 1994. The Education Guide, 2012 issued by the CBEC inter alia provides the various factors that needs to be considered in determining whether a person is an intermediary. The relevant extract is reproduced hereunder:
“Nature and value: An intermediary cannot alter the nature or value of the service, the supply of which he facilitates on behalf of his principal, although the principal may authorize the intermediary to negotiate a different price. Also, the principal must know the exact value at which the service is supplied (or obtained) on his behalf, and any discounts that the intermediary obtains must be passed back to the princi
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ence authorizing him to act on behalf of the provider of the main service!”
19. Para 5.9.6 of the Education Guide, 2012 issued by the CBEC clarifies the scope of the term intermediary. The relevant extract is reproduced hereunder;
“Similarly, persons such as call centres, who provide services to their clients by dealing with the customers of the client on the client's behalf, but actually provided these services on their own account, will not be categorized as intermediaries.”
In the instant case, although the Applicant deals with the service recipients customers, but the same is for the purpose of providing services to the service recipient on its own account. Consequently, the services provided by the Applicant cannot be classified as Intermediary services”.
20. In an identical case as the present situation, GODADDY India Web Services Pvt. Ltd. had filed an Advance Ruling under the Service tax regime [2016 (46) STR 806 (A.A.R.)] = 2016 (3) TMI 355 – AUTHORITY FOR ADVANCE RULINGS.
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ervice, Further, applicant would provide said service as a package and the payment for the entire package would be a consolidated lump sum payment. Applicant submits that in view of these indicators, service provided by them to GoDaddy US is a bundle of services, which is bundled in the normal course of business. This point has not been controverted by the Revenue. We agree with the submissions of the applicant that proposed services are a bundle of services, bundled in normal course of business and not intermediary service.”
21. Applying the above to the present case, while the scope of services provided to the Asahi Kasei group is very wide, the same would fall within the ambit of the term “composite supply” with the marketing services being the principal supply
22. In view of the above, it is amply clear that the services provided by the Applicant cannot be considered as an “Intermediary services”. However, in order to determine the correct classification of the services provided
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rt services and other transaction processing.
Explanation – For the purposes of this clause, the expression infrastructural support services” includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretaria services, internet and telecom facilities, pantry and security;”
[Pre-negative List regime]
“Section 65B(49) “support services means infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of immovable property, security, testing and analysis;”
[Negative List regime]
24. From the above, it can be construed that marketing services, advertisement and promotion services, customer relationship management, evaluation of prospe
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features so as to assist in determining the nature and scope of the Indian market potential;
b) Assisting the service recipient in the adaptation and implementation of its advertising policy;
c) Assisting the service recipient in conducting sales prospection through participation in industry events such as scientific gatherings, exhibitions, trade shows and the like;
d) Liaising with Customers and potential Customers and to collect their product development plans and strategy and “road-maps”, as well as their product specifications; and reporting the same to the service recipient the information obtained through such interactions;
e) Providing any feedback to the service recipient that would help improve the service recipient's marketing; Facilitating the service recipient in arrangement of discussions and provision of interpretation services and cross culture advice; or the sake of clarity, neither AKI (i.e. the Applicant) nor any of its representatives shall have any authority t
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and maintaining contact with regulatory agencies) and reporting the same to the service recipient; and
j) Any other assistance in the context of the above, regarding service recipient's marketing activities that may be reasonably requested by service recipient after the effective date in writing to AKI.”
It may however be noted that the scope of service for the marketing services agreement with APNA do not include the points (c), (g) and (i) as mentioned above
Statement containing the applicant's interpretation of law
As in case of Question No. 2 above
QUESTION NO. 3
Question on which advance ruling is required
Whether the services provided by the Applicant is an export of services as defined under Section 2(6) of the Integrated Goods and Services Tax Act 2017?
Statement of facts having a bearing on the question
The Applicant receives payment in freely convertible foreign exchange i.e. Japanese Yen / United States Dollar
Statement containing the applicant's interpretation of
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ace where the person has obtained registration, the location of the supplier shall be such place of business. In the instant case, the Applicant is providing service from Maharashtra for which it has obtained GST registration. Consequently, the location of the supplier of service shall be Maharashtra i.e. in India.
b. Condition II – Recipient of service is located outside India
The term “location of the recipient of services” has been defined under section 2(14) of the IGST Act. As per the said definition, if a supply has been received from a registered place of business or registered fixed establishment, the location of the recipient shall be the respective place of business or fixed establishment. However, in other cases, the usual place of residence of the service recipient shall be the location of the service recipient. In the instant case, the Asahi Kasei group is not registered in India and therefore, their registered place of business will be their registered address (i.e. out
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le foreign exchange
As mentioned in the foregoing paragraphs, the consideration charged by the Applicant is in convertible foreign exchange i.e. Japanese Yen / United States Dollar.
e. Condition V – Supplier of service and recipient of service are not merely establishment of distinct person
Explanation 1 to Section 8 inter alia provides that where a person has an establishment in India and any other establishment outside India, then such establishments shall be treated as establishments of different legal persons. The term person has been defined to include a Company. In the instant case, the service recipient i.e. Asahi Kasei group is not an establishment formed by the Applicant and consequently, it cannot be treated as an establishment of a distinct person.
3. In view of the above, it can be construed that the Applicant fulfils all the conditions for treating the supply of services as an export of services in terms of Section (6) of the IGST Act. Therefore, the answer to Question
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3) Whether the service provided by the Applicant is an export of services as defined under Section 216) of the Integrated Goods and Service Tax Act 2017?
Statement of facts having bearing on the question (1):
Asahi Kasei India Pvt. Ltd., (hereinafter referred to as the “Applicant') has entered into Service Agreement dated 1st March, 2013 with Asahi Kasei Corporation, a Japanese Corporation. However, the address mentioned in the agreement is (The Capital, Office No.801-C, 8th floor, Plot No C70, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051, which is different from Advance Ruling Application of the applicant.
The scope of the services provided by the Applicant under Service Agreement with Asahi Kasei Corporation, Japan (dated 01 March 2013) as amended on 05 January 2017 are highlighted at Clauses 4 to 8 of the Agreement. The relevant extract of the agreement is reproduced hereunder:
“4. Party B (i.e. the Applicant) agrees to conduct from time to time, as and when requ
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m time to time, as and when representatives of Party A, or its related business circles or customers visit the Territory and Party A so requests, Party B shall provide necessary assistance in liasoning and coordinating activities (including interpreting) to such representatives.
7. From time to time, as and when requested by Party A, Party B shall make market surveys of the Products in the Territory and report the results thereof to Party A.
8. Party B shall perform services, as directed by Party A, resulting from the assignments pursuant to paragraph 4 through 7 of this Agreement, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters.”
As per Clause 9 of the Agreement, Service consideration received by the Applicant is the direct cost+ apportioned overhead expenses+10% margin +applicable taxes.
From perusal of the above extract of the agreement it is seen that the Applicant is engaged in the activities for the party A, viz.
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gal matters.
PRAYER
In view of the above, it can be said that
i) The research on the matters related to functions of holding company such as corporate accounting, corporate finance, corporate personnel and labor relations, corporate research and development, market surveys appears to come under the category of 'Market Research services' under Heading No.998371;
ii) Research on the matter of corporate intellectual property appears to come under 'Legal documentation and certification services concerning patents, copyrights and other intellectual property rights services' which fall under Heading No.998213
iii) The economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries, appears to fall under 'Original compilations of facts or information' which fall under Heading No.998394' / Business Support Service(9985).
iv) Providing necessar
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ned in the agreement is 'The Capital, Office No. 801-C, 8th floor, Plot No.C70, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051, which is different from Advance Ruling Application of the applicant.
The scope of the services provided by the Applicant under Marketing Services Agreement with Bioprocess Division of Asahi Kasei Medical Co. Ltd., are highlighted at Article 2 of the Agreement. The relevant extract of the agreement is reproduced hereunder: Bioprocess Division of Asahi Kasei Medical Co. Ltd. referred to as “AM” in agreement dated 01 December 2012.
The services shall comprise the following activities, all of which are described with respect to the Products in the Territory, and all only to be conducted at and under the explicit direction of AM.
a) Conducting market surveys and providing the AM with information on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential;
b) Assisting AM in the adaptation
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mers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI (applicant) will not be the premises of AM and the same shall not be made available to employees or other personnel of AM who may visit India;
h) Providing information on products and its functioning or similar such services to AM's customers and notifying AM of any Customer complaints;
i) Monitoring regulatory developments (including, where possible, establishing and maintaining contact with regulatory agencies) and reporting on these to AM; and
j) Any other assistance in the context of the above, regarding AM's marketing activities that may be reasonably requested by AM after the Effective Date in writing to AKI(Applicant).”
From perusal of the extract of the above agreement dated 01.12.2012 it is seen that the Applicant is engaged
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negotiations on behalf of AM, connecting Customers with AM representatives for the purpose of obtaining orders and establishing and maintaining close commercial relationships between AM and customers, providing staff of AM or its customers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI(applicant) will not be the premises of AM and the same shall not be made available to employees or other personnel of AM who may visit India, providing information on products and its functioning or similar such services to AM's customers and notifying AM of any Customer complaints, monitoring regulatory developments (including, where possible, establishing and maintaining contact with regulatory agencies) and reporting on these to AM; and any other assistance in the context of the above, regarding AM's marketi
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and “road-maps”, as well as their product specifications, and reporting to AM abroad, information obtained through such interactions appears to be connected to the services at Para 10 above as principal supplies, therefore in terms of Section 8 of the Central Goods and Service Tax Act, 2017 read with Section 20 of the Integra ted Goods and Service Tax Act, 2017. Therefore the said service 'Original compilations of facts or information' which individually fall under Heading No.998394' / Business Support Service(9985) will be supplied as Composite Supply and in terms of Section of the IGST Act, 2017.
v) Providing any feedback to AM that would help improve AM's marketing; Facilitating AM in arrangement of discussions and provision of interpretation services and cross culture advice; for the sake of clarity, neither AKI (i.e. the Applicant) nor any of its representatives shall have any authority to conduct negotiations on behalf of AM, appears to fall under 'Other professional, technical
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his the service category is not clearly mentioned, hence, Advance Ruling should not be given for this services;
ix) Monitoring regulatory developments (including, where possible, establishing and maintaining contact with regulatory agencies) and reporting on these to AM, appears to fall under 'Other Legal services nowhere else classified' under Heading No.998216; and
x) Any other assistance in the context of the above, regarding AM's marketing activities that may be reasonably requested by AM after the Effective Date in writing to AKI(Applicant). In this, the service category is not clearly mentioned, hence, Advance Ruling should not be given for this services;
Statement of facts having bearing on the question (3):
The Term “export of services” as defined under Section 2(6) of the IGST Act and the term “intermediary” as defined under Section 2(13) of the IGST Act. The relevant extract is set out hereunder:
“(6) export of services” means the supply of any service when
(i) The s
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GST and providing the service from Maharashtra, India. Hence fulfilling the first condition with reference to term “location of the supplier of service” is located in India, as defined under Section 2(15) of the IGST Act.
b. Condition-II- Recipient of service is located outside India.
In the instant case the service recipient M/s. Asahi Kasei Corporation (Service Agreement) and Asahi Kasei Medical Co. Ltd (Marketing Service Agreement) is not registered in India and therefore their registered place of business will be their registered address (i.e outside India). Hence fulfilling the first condition with reference to term “The recipient of service is located outside India” as defined under Section 2(14) of the IGST Act.
C. Condition-III place of supply of Service is outside India.
The services provided by the Applicant is in nature of different services in the above two agreement viz, in Service agreement dated 1st March, 2013, the following services appears to be applicable
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' under Heading No.998216;
The place of supply in the instant case is determined as per general rule i.e Section 13(2) of IGST Act where the location of the recipient of services shall be the place of supply of services and Section 13(3) to 13(13) where place of supply shall be the location where services are actually performed. In the present case, the place of supply of Service regarding the two agreements, the Details are as follows:
In Service agreement dated 1st March, 2013,
1. The research on the matters related to functions of holding company such as corporate accounting, corporate finance, corporate personnel and labor relations, corporate research and development, market surveys appears to come under the category of 'Market Research services' under Heading No.998371, will be covered under Section 13(2) of the IGST Act, 2017 and place of supply of service or shall be the location of the recipient of services;
2. Research on the matter of corporate intellectual property appe
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es which fall under Heading No.99859, will be covered under Section 13(3)(b) interalia Section 13(4) of the IGST Act, 2017 and the place of supply of service shall be the location where the services are actually performed.
5. Regarding Para 8 of the agreement, it is felt that Advance Ruling cannot be given because without proper and full facts. In this Para, conditions like 'but not limited to' is mentioned, which does not give a clear picture of what services it pertains to. Hence, Advance Ruling or for Para 8 cannot be given.
6. Regarding Para 9 of the agreement, it is subject to separate treatment to any intermediary activities where place of provision of service is governed by Section 13(8) of the CGST Act, 2017.
In Marketing Service agreement dated 01.12.2012,
7. Conducting market surveys and providing the AM with the information on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential appears to fall under 'Market
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atives for the purpose of obtaining orders and establishing and maintaining close commercial relationships between AM and customers, will be covered under Section 13(8)(b) of the IGST Act,2017 as 'intermediary services' and the place of supply of service shall be the location where the services are actually performed, appears to fall under 'business support services' under Heading No.99859.;
11. Liaising with Customers and potential customers and to collect their product development plans and strategy and “road-maps”, as well as their product specifications, and reporting to AM abroad, information obtained through such interactions appears to be connected to the services at Para 10 above as principal supplies, therefore in terms of Section 8 of the Central Goods and Service Tax Act, 2017 read with Section 20 of the Integrated Goods and Service Tax Act, 2017, the said service 'Original compilations of facts or information' which will individually fall under Heading No.998394', / Busine
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ons on behalf of AM, appears to fall under 'Other professional, technical and business services nowhere else classified' under Heading No.998399, will be covered under Section 13(2) of the IGST Act, 2017 and place of supply of service or shall be the location of the recipient of services;
14. Providing staff of AM or its customers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI (applicant) will not be the premises of AM and the premises of AKI(applicant) in India shall not be made available to employees or other personnel of AM who may visit India, will be covered under Section 13(3)(b) interalia Section 13(4) of the IGST Act, 2017 and the place of supply of service shall be the location where the services are actually performed.
15. Providing information on products and its functioning or s
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ment in freely convertible foreign exchange i.e. Japanese Yen / United States Dollar.
e. Condition V – Supplier of service and recipient of service are not merely establishment of distinct person.
Explanation 1 to Section 8 of IGST Act provides that -For the purposes of this Act, where a person has, –
(i) an establishment in India and any other establishment outside India;
(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or
(iii) an establishment in a state or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons.
PRAYER
In view of the above, it can be construed that in some services (as mentioned above) the Applicant fulfils all the conditions for treating the supply of services as an export of services in terms of Section (6) of IGST Act and in some services (as
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the facts of the case. The issue put before us is in respect of a future transaction which would be on the lines thus –
The Applicant provides sales promotion and marketing support to Asahi Kasei group. For this, the Applicant has entered in to a Services Agreement dated 01 March 2013 with Asahi Japan and Marketing Services Agreement with various group companies of Asahi Kasei group. The scope of work under the Agreement is broadly stated below:
a. Collecting and analyzing information i.e. market analysis and supporting Asahi Kasei group in getting new business;
b. Providing marketing & administration support and back-office support (including accounting Support);
c. Networking i.e. co-ordinate with the government authorities and relevant universities to join relevant trade associations;
d. Supporting sales activity of Asahi Kasei group.
On this set of facts applicant has raised questions which are as under:-
Que 1: Whether the service supplied by the Applicant under the Service
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B agrees to provide Party A from time to time, as and when requested by Party A, with economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries in the Territory (i.e. India or any other mutually agreed territory) as Party A may from time to time request. In the event Party A should require more detailed information than that so provided by Party B, Party B shall exert its best efforts to obtain such further or more detailed information.
6. At such time and from time to time, as and when representatives of Party A, or its related business circles or customers visit the Territory and Party A so requests, Party B shall provide necessary assistance in liasoning and coordinating activities (including interpreting) to such representatives.
7. From time to time, as and when requested by Party A, Party B shall make market surveys of the P
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vices or both or securities on his own account
The concept of intermediary under the GST Act is substantially identical to the concept of intermediary under the erst while service tax regime. This concept has been explained in the Education Guide issued by CBEC in the year 2012 as under:
In order to determine whether a person is acting as an intermediary or not, following factors need to be considered:
Nature and value: An intermediary cannot alter the nature or value of the service, the supply of which he facilitates on behalf of his principal, although the principal may authorize the intermediary to negotiate a different price. Also, the principal must know the exact value at which the service is supplied (or obtained) on his behalf, and any discounts that the intermediary obtains must be passed back to the principal.
Separation of value: The value of an intermediary's service is invariably identifiable from the main supply of service that he is arranging. It can be based on an a
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possible situations here- one when he acts on his own account, and the other, when he acts as an intermediary.
When he acts on his own account (say, for an export shipment)
A freight forwarder provides domestic transportation within taxable territory (say, from the exporter's factory located in Pune to Mumbai port) as well as international freight service (say, from Mumbai port to the international destination), under a single contract, on his own account (i.e, he buys-in and sells freight transport as a principal), and charges a consolidated amount to the exporter. This is a service of transportation of goods for which the place of supply is the destination of goods. Since the destination of goods is outside taxable territory, this service will not attract service tax. Here, it is presumed that ancillary freight services (i.e. services ancillary to transportation- loading, unloading, handling etc.) are “bundled” with the principal service owing to a single contract or a single pric
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he matters related to the functions of the holding company, such as corporate accounting, corporate finance, corporate personnel and labor relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party A with its report of the research thereon.
2. To provide with economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries in the Territory.
3 To provide necessary assistance in liasoning and coordinating activities (including interpreting) to such representatives.
4. To make market surveys of the Products in the Territory and report the results thereof to Party A.
5. All other related services pertaining to above services including, but not limited to, those services with regard to finance, accounting, and patent and legal matters.
We clearly find from the scrutiny of clause 15
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'.
As a corollary of this finding, we shall now move on to decide whether the services supplied by the applicant constitute composite supply and categories as 'support services'?
Applicant has strongly relied on the definition of composite supply as defined under section 2(30) of the GST, the Education Guide-2012 and the decision of ARA in case of Godday India Web Services Pvt. Ltd. [2016 (46) 806 (AAR) = 2016 (3) TMI 355 – AUTHORITY FOR ADVANCE RULINGS to submits that the supply of services as evidenced by the Services Agreement constitute composite supply with the Marketing Services as principal supply. The expression 'Composite Supply' has been defined under GST Act, as below –
(80) “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 ordinary course of business, one of which is a pr
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upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators some of which are listed below –
The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business.
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.
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 servi
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rally bundled in the ordinary course of business. Each case has to be individually examined in the backdrop of several factors some of which are outlined above.
In the present case from the Services Agreement we find that applicant proposes to provide two different categories of services which are as below:
A) Research on the functioning of the company : Services pertaining to research on the matters related to the functions of the holding company such as – corporate accounting, corporate finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party A with its report of the research thereon
B) Information on the markets in the territory : Services pertaining to information on the markets in the territory includes –
i) Economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar inf
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–
i) Economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries in the Territory.
ii) To provide necessary assistance in business activities (including interpreting) to such representatives.
iii) To undertake market surveys of the Products in the Territory and report the results thereof to Party
iv) Ancillary services to all above services, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters.”
From the nature of services it is evident that these services are not interdependent but could be provided as standalone services. In as much as we can say that applicant proposes to provide two distinct category of supplies. And as such services provided by this agreement can not constitute 'composite supply' as defined under the GST Act. However, we observe that services menti
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services to determine the most appropriate service tariff code:
Sr.no.
Chapter, section, heading or group
Service code (tariff)
Service description
296
Heading 9983
Other professional, technical and business services
297
Group 99831
Management consulting and management services; information technology services
298
998311
Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management
299
998312
Business consulting services including public relations services
300
998313
Information technology consulting and support services
301
998314
Information technology design and development services
302
998315
Hosting and information technology infrastructure provisioning services
303
998316
Information technology infrastructure and network management services
304
998319
Other information technology serv ices n
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research services
347
998372
Public opinion polling services
Sr.no.
Chapter, section, heading or group
Service code (tariff)
Service description
444
Group 99859
Other support services
445
998591
Credit reporting and rating services
446
998592
Collection agency services
447
998593
Telephone-based support services
448
998594
Combined office administrative services
449
998595
Specialised office support services such as duplicating services, mailing services, document preparation and the like
450
998596
Events, exhibitions, conventions and trade shows or organisation and assistance services
451
998597
Landscape care and maintenance services
452
998598
Other information services nowhere else classified
453
998599
Other support services nowhere else classified
From the detailed examination of above table we find that the services provided by the applicant in
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services to all above services, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters would fall under service code tariff 99837 with service description market research services.
Question: – 2. Whether the service supplied by the Applicant under the Marketing Services Agreement dated 1 December 2012 constitute a supply of “Support services” falling under HSN code 9985 or “Intermediary service” classifiable under HSN code 9961 / 9962?
Applicant entered into 'Marketing Service Agreement' dated 1st December 2012 with Bioprocess Division of Asahi Kasei Medical Co. Japan (in short AM). As per the preamble the services are proposed to be provided with the sole intention to develop/ argument sales of bioprocess consumables and for that purpose AM desires to secure market support services offered by the Applicant. Applicant proposes to provide services which shall comprise of following activities.
“a) Conducting market surveys and pr
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(ire, the Applicant) nor any of its representatives shall have any authority to conduct negotiations on behalf of the service recipient;
f) Connecting Customers with representatives of the service recipient for the purpose of obtaining orders and establishing and maintaining close commercial relationships between service recipient and customers;
g) Providing staff of the service recipient or its customers visiting the territory with such assistance as may be reasonably requested by them, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI will not be the premises of the service recipient and the same shall not be made available to employees or other personnel of service recipient who may visit India;
h) Providing information on products and its functioning or similar such services to service recipient's customers and notifying service recipient of any consumer complaints;
i
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t applicant shall not carry out any act that will be binding on AM, such as conclusion of contracts, acceptance of sales order, invoicing, determination of sales prices, rebates or discounts, resolution of customers complaints or settlement or disputes with the customers. On this factual matrix we discuss whether the provision of services constitute 'intermediary' as defined under section 2(16) of IGST Act. The definition is already reproduced in preceding para of this ruling.
The concept of intermediary under the GST Act is substantially identical to the concept of intermediary under the erst while service tax regime. This concept has been explained in the Education Guide issued by CBEC in the year 2012 which we have already reproduced in this ruling.
We find from the scrutiny of Marketing Services Agreement that the relationship between the parties is that of independent contractors meaning that the agreement does not intend to create relationship of principal and agent. The applic
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= 2016 (3) TMI 355 – AUTHORITY FOR ADVANCE RULINGS to submit that the supply of services as evidenced by the Marketing Services Agreement Constitute composite supply with Marketing Services as principal supply. The expression 'Composite Supply' has been defined under GST Act, which we have already reproduced in the preceding paras.
Under the GST Act, a composite supply would mean a supply 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 ordinary course of business, one of which is a principal supply. We find that applicant proposes more than two taxable supplies to the recipient. In respect of supply which consists of more than two taxable supplies and to fall within the ambit of composite supply, it will be necessary to determine whether a particular supply is naturally bundled in the ordinary course of business and what constitutes principal supply. The co
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otential for recipient of services.
With regards to the classification of services under the rate notification 11/2017 as amended from time to time, and the annexure of classification of services we find following entries that are relevant for the present purpose.
Sr.no.
Chapter, section, heading or group
Service code (tariff)
Service description
345
Group 99837
Market research and public opinion polling services
346
998371
Market research services
347
998372
Public opinion polling services
From the perusal of above table and the finding by us as above, we hold that the services the applicant proposes to provide would fall under Group 99837 as Market Research Services.
Question: – 3. Whether the services provided by the Applicant is an export of services as defined under Section 2(6) of the Integrated Goods and Services Tax Act 2017?
The expression export of services has been defined under the GST Act as below:
“(6) export of services” means th
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of the recipient of services i.e. AM Japan, which is outside India. As the applicant satisfies all the ingredients of 'export of services' the service provided by the 'Marketing Services Agreement' would qualify as an export of taxable service.
05. In view of the extensive deliberations as held hereinabove, we pass an order as 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-35/2018-19/B-108
Mumbai, dt. 05/09/2018
For reasons as discussed in the body of the order, the questions are answered thus
Question:-1. Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of “Support services” falling under HSN code 9985 “Intermediary service” classifiable under HSN code 9961 /9962?
Answer: (i) The services provided by the applicant in the nature of Research on the matter related to functioning of the holding of company such as
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