2018 (7) TMI 881 – AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH – 2018 (14) G. S. T. L. 559 (A. A. R. – GST) – Input Tax Credit (ITC) – seeking credit packaging material which is to be used in exempted supply, till they are into their stock – ITC while transferring goods between their 'own branches – multiple taxes on transfer of goods to other branches of the applicant
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Held that:- As per provisions of section 17(2) of CGGST Act, 2017 any registered recipient can claim ITC to the extent of taxable stock or taxable outward supply shown in their returns. The registered recipient cannot claim ITC on the amount of taxable supply component included in the total amount of exempted supply. The amount of unclaimed ITC shall also be reversed in the electronic ledger of the same month – If the applicant supplies seeds (exempted item) in packaged form using such packing materials (taxable item), to its own branches in other States, then no ITC could be claimed on the packaging material used
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p Input Tax Credit (ITC) of the packaging material till they are into their stock and regarding ITC while transferring goods between their 'own branches. This ruling has been sought by the applicant in the light of section 17 of CGGST Act, 2017 stipulating therein non accumulation of ITC in case of units dealing in non-tax/exempted goods. The aforesaid Advance ruling has also been requested by the applicant as for each such transfer they have to pay GST merely for internal transfer of goods from one branch to another branch for one goods and the same goods in same hands would be liable for multiple tax which will be against the core principles of GST. 2. Facts of the case:- I. The applicant M/s VNR Seeds Pvt. Ltd. Raipur with multiple registrations under GST in various States is involved in the business of supplying seeds (in packaged form using packing materials), for sowing purpose, which is exempted item. II. They procure taxable packaging materials/commodities etc. which are re
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rated their contention. He also furnished a written submission dated 24/5/2018, which has been taken on record. 5. The legal position, Analysis and Discussion:- 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 -The Applicant is involved in – a. The supply of seeds (exempted item) in packaged form using packaging material (taxable under GST) and also in b. Supply of such packaging materials and other consumables to their own branches situated in other States across India. 5.1 The Applicant has submitted that they are involved in the business of supplying seeds in packaged form using such packaging materials. Seeds are exempted from GST whereas packing materials and other consumables are taxable. Thus, this supply of the applicant falls under the category of composite supply, as stipulated under the provisions mentioned hereunder:- i U/s. (2)30 of CGGST Act, 2017:- "Compos
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scribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. iv U/s. 49(1) of CGGST Act, 2017:- Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, maintained in such manner as may be prescribed. v. U/s. 41 of CGGST Act, 2017;- Claim of input tax credit and provisional acceptance thereof :- (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount
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of exempted supply. The amount of unclaimed ITC shall also be reversed in the electronic ledger of the same month. Thus it is clear from the above legal provisions that if the applicant supplies seeds (exempted item) in packaged form using such packing materials (taxable item), to its own branches in other States, then no ITC could be claimed on the packaging material used for the said exempted supply of seeds. Whereas, if the applicant supplies only packing material to own branches in other States, then the ITC involved in purchase of such packing material could be availed as per section 17(2) of CGGST Act, 2017. In view of the deliberations and discussions as above, we pass the following order: Order (Under section 98 of the Chhattisgarh Goods and Services Tax Act, 2017) In view of the discussions held above, the ruling sought by the applicant is answered as under:- The applicant is not entitled to ITC on the packing material used for packaging seeds, while making such exempted suppl
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