2018 (8) TMI 977 – APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (15) G. S. T. L. 727 (App. A. A. R. – GST) – Input tax credit – purchase of motor vehicles i.e. cash carry vans – cash management network pan India – purchase of motor vehicles i.e. cash carry vans, which are purchased and used for cash management business and supplied post usage as scrap – whether the money being transported by the Appellant in the cash carry vans is “goods” or otherwise for the purposes of availing Input Tax Credit under the GST law? – Held that:-
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Held that:- The argument of the Appellant that, although in general understanding, what is being transported by the appellants is currency or cash or money, from the Appellant's point of view or for the appellant, what is transported is 'goods' and not 'money', does not support their cause, as the definitions provided in Acts are universal and same cannot be interpreted for suiting the requirement of any individual as claimed by the Appell
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ct. Further, the CGST Act, 2017 and MGST Act, 2017, sometimes, shall also be referred as GST Act. M/s CMS Info Systems Limited (herein after referred to as the Appellant ) had filed application for advance ruling under the provision of Section 97(1) of the CGST Act, 2017. However, the members of the Advance Ruling Authority differed in their opinion in deciding one of the two issues/questions raised by the applicant before them. Accordingly, the said issue, which remain undecided by the Authority for Advance Ruling, has been referred before this appellate authority under the provision of Section 98(5) of the CGST Act, 2017. BRIEF FACTS OF THE CASE 1. The Appellant is having cash management network pan India. During the course of providing the cash management services, the appellant is engaged in the following activities: Providing ATMs and installing the same at various locations across India. Managing cash circulation through transporting cash from currency chest to bank branches. Cas
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ge can be treated as supply in the course or furtherance of business and whether such transaction would attract GST? If yes, please provide the rate of GST and/or Compensation Cess. II. If answer to Question I is in affirmative, whether Input Tax Credit is available to CMS Info Systems Limited on purchase of motor vehicles i.e. cash carry vans which are purchased, used for cash management business and supplied post usage as scrap. ORDER PASSED BY AUTHORITY FOR ADVANCE RULING 5. Regarding the issue raised in the Question I of the application, it is held that supply of motor vehicles i.e. cash carry vans as scrap after its usage will be treated as supply in the course or furtherance of business in terms of the provision of Section 7 of the CGST Act, 2017 and such transaction would attract GST as the disposal of cash carrying van is a transaction in connection with or incidental to or ancillary to business in so much as the sale proceeds of such vans is treated as income and reflected in
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here was difference in opinion on this particular issue between two members of the Advance Ruling Authority. Therefore, the matter has been referred to the Appellate Authority for Advance Ruling for giving the appropriate ruling in this regard. GROUNDS OF APPEAL 7. The Appellant submitted that they are lawfully eligible and entitled for input tax credit of the GST paid on standard motor vehicle and also GST paid on the fabrication of the vehicles to suit the need for cash carrying vehicle. 8. According to Section 17(5)(a) of CGST Act, 2017, input tax credit on motor vehicles and other conveyance is not available; however, the exception has been carved out inter-alia to the motor vehicles and other conveyances used for transportation of goods. In other words, if the motor vehicles and conveyance is used for transportation of goods, input tax credit on motor vehicles is available. The relevant portion of the said section 17(5)(a) is reproduced below: Section 17 Apportionment of credit an
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llip;….. (2)………………. (52) goods means every kind of movable property other than money and securities but includes actionable claims, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under contract of supply; 10. Meaning to money has been assigned under clause (75) to Section 2 of the CGST Act, 2017, which is reproduced below: Section 2. Definition – In this Act, unless the context otherwise requires,- (1)………………. (2)……………… (75) money means the Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveler cheque, money order, postal or electronic remittance or any other instrument recognized by the Reserve Bank of India when used as a consideration to settle an obligation or exchange with Indian legal tender of another
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tivity of transportation, the said currency is plain goods for the Appellants and cannot be used/is not used in exchange of other Indian legal tender of another denomination. 13. In other words, although in general understanding, what is being transported by the appellants is currency or cash or money, from the Appellant's point of view or for the appellant, what is transported is 'goods' and not 'money' as the said goods being transported would not serve the same purpose of 'money' as in the normal circumstances the money in hands of a person would serve i.e. for the payment of purchases/settlement of dues/discharge of debts etc.; 14. It is once again re-iterated that currency/cash is being transported by the Appellants and in support thereof, copy of CA Certificate dated 25.09.2017 and Draft Red Herring prospectus dated 27.09.2017 is enclosed. 15. In view of the above, the cash carry vans are used for transportation of goods as the currency being transport
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tion 2 (75) of the CGST Act as the said currency cannot be used as money as understood in the common parlance. Further, the intention of the legislature in excluding money from the definition of goods is not to levy CGST on supply of money as otherwise CGST is leviable on supplies of intra- state supply of goods. 18. Rule 138(14) which carves out goods the transportation of which would not require the preparation of e-way bill. The said rule specifically mentioning currency under the title description of goods further substantiates the contention of the Appellant that the currency transported by the cash carry van is goods . 19. The provision of the Motor Vehicle Act, 1988 assigned meaning to goods under Section 2 (13), goods carriage under Section 2(14) and transport vehicle under Section 2(47) would also substantiate that the currency would be treated as goods. The said provisions are reproduced herein below: 2. Definition- In this act, unless the context otherwise requires,- &hellip
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eserve Bank of India falling under chapter/heading 48/4907 would also substantiate the Appellants' claim that currency is covered under goods . 21. The certificate of registration and also certificate of fitness issued by the Motor Vehicle Department of Govt, of Maharashtra certifying cash carrying vans to be a 'goods carrier' and 'goods vehicle' also support the Appellant stand. 22. From the certificate of registration, certificate of fitness issued under Motor Vehicle Act and after considering the meaning assigned to the 'goods' under Section 2(13), goods carriage under Section 2(14) and transport vehicle under Section 2(47) of the Motor Vehicles Act, it is clear that the cash carry vans are used for transportation of goods. Hence, Revenue authorities cannot take a different view under GST. 23. It is further submitted that the Appellant are carrying out the business as defined in Section 2(17) of the CGST Act and without currency being transported by the A
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e eligible and entitled for input tax credit of GST paid by them to vehicle manufacturers for supply of standard vehicles and GST paid on the fabrication. The Appellate Authority for Advance Ruling may also be pleased to hold cash carry vans would be covered under exclusion clause of 17(5)(a)(ii) of CGST. SUBMISSION MADE BY THE RESPONDENT 27. In response to the above submissions made by the Appellant, the respondent, in this case the 'Jurisdictional Officer' has filed their reply, which is being reproduced hereunder: 28. The applicant is engaged in the services of transportation of cash. The cash carrying vans cannot be treated merely as transport vehicles, carrying the goods as claimed by the appellant, as it is a special purpose vehicle which is deployed to collect the currency under the security guards with arms and with 2 supervisors as per the Guidelines of Reserve Bank of India letter dated 06th April, 2018. 29. The appellant transports and manages the money which is diff
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the CGST Act, 2017, has been made without having any rational or basis. It is emphasized that the CGST Act has provided an unambiguous and clear definition of 'goods'. Therefore, there is no need for resorting to the provisions of Motor Vehicle Act for looking for the meaning of 'goods'. Further, the exclusion of the 'money' from the scope of the e- way bill has no bearing on the definition of the 'goods' provided in the CGST Act. The contention of the appellant in this regard is bereft of any merit, hence not sustainable. 31. Accordingly, they have prayed that the application filed by the Applicant be rejected by the appellate authority. PERSONAL HEARING 32. A personal Hearing in the matter was conducted 19.07.2018, when Smt. Manasi Patil, Advocate, appearing on behalf of the Appellant, reiterated their written submissions. She further deposed that they were lawfully eligible and entitled for input tax credit of the GST paid on standard motor vehicle a
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vehicle, which is deployed for transport of the currency under the supervision of the security guards carrying arms with them and 2 other supervisors as per the guidelines prescribed by the Reserve Bank of India dated 06.04.2018. Thus the money transported by the said special purpose vans, is different from 'goods' defined under the GST law, since the above said safeguards prescribed by the RBI for the transportation of cash are not applicable on other 'goods'. DISCUSSION AND FINDINGS 34. On going through all the relevant case records, oral & written submissions made by the Appellant and the Respondent, we find that the issue before us is to determine whether the money being transported by the Appellant in the cash carry vans is goods or otherwise for the purposes of availing Input Tax Credit under the GST law. 35. For this purpose, we observe from a plain reading of the definition of the 'goods' provided in the Section 2(52) of the CGST Act, 2017, that the
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widen the scope of the ITC to cover the ITC even in respect of motor vehicles used for transportation of money for or by a banking company or financial institution, as quoted below: PRESS NOTE July 21, 2018 Recommendations made during the 28t meeting of the GST Council held in New Delhi on 21st July, 2018 Amendments to the CGST Act, 2017, IGST Act, 2017, UTGST Act 2017, and GST (Compensation to States) Act, 2017. 1. The GST Council in its 28th meeting held today at New Delhi has recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act. 2. The major recommendations are as detailed below: 2 to 8………. 9. Scope of input tax credit is being widened, and it would now be made available in respect of the following: a. Most of the activities or transactions specified in Schedule III; b. Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft; c. Mot
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oney' as 'goods', as defined under Section 2(52) of the CGST Act. Now the GST Council have recommended to the Government to lay before the legislature an amendment in the provision which will extend the benefit of ITC in respect of the motor vehicles, used for transportation of money for or by a banking company or financial institution. Thus, this proposed amendment recommended by the GST Council during its 28th meeting, further strengthens our findings above that money being transported by the Appellant in the cash carry van is certainly not goods as is being claimed by the Appellant. In fact, given the collective mind of the GST Council on the subject, the argument stands clinched in favour of the Respondents. 37. Accordingly, the arguments extended by the Appellant in the support of their appeal, including ruling by the courts, are distinguished as below: (a) Printers (Mysore) Ltd. And Another v. Asstt. Commercial Tax Officer and others [(1994)2 SC Cases 434]: Here the H
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ession of goods by following the Golden Rule of interpretation as the literal meaning was leading to the unintended result and absurdity. However, in the instant case, neither had there been any amendment in the GST law nor were there any benefits continuing to the Appellant, which they would be bereft of if the expression goods be interpreted by the literal meaning of the definition provided under GST Act, for this is not leading to the any unintended result or absurdity as such. The definitions provided under the GST law are clear enough, as we have already seen. Thus, the current context does not warrant that the definition be construed otherwise or in a different manner. (b) Further, the Appellant's contentions that the definitions provided under Section 2 of the CGST Act starts with the clause unless the context otherwise requires , and that the facts of the case call for a different interpretation of the meaning of the goods provided under Clause 52 of the Section 2 of the CG
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y which cannot be treated as goods as explained above. Therefore, in the instant case, there is no need to derive the interpretation of the goods from the Customs Act or Foreign Exchange Regulation Act, when the same is clearly defined under the CGST Act. Thus, the ratio of this judgment also cannot be applied in the instant case by virtue of entirely different facts and circumstances. (d) Anyanwu Marteena Uchechi [ 2015(329) E.L.T. 750 (GOI)]. It is observed that the above said case involved refund of the seized foreign currency after adjustment of redemption fine and penalty from the seized amount , which is entirely different from the facts and circumstances of the instant case, which involves the determination of the money as goods or otherwise under the light of CGST law and its provisions. Hence, the said citation is not relevant for deciding the present case. (e) As regards, the contention made by the Appellant on the classification of the cash carrying vans under the goods carr
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t require the preparation of e-way bill, we agree with the view of the Jurisdictional Officer that the exclusion of the 'money' from the scope of the e- way bill has no bearing on the definition of the 'goods' provided in the CGST Act and the same should not prevail over the provisions laid down in Act. (g) As regards Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, wherein full exemption has been provided to Rupee notes, placed at Sr. No. 117 and falling under chapter/heading 48/4907, when sold to Reserve Bank of India, it is noticed that the said exemption has been provided to the Rupee notes on which printing is done by RBI to convert them into currency and not the printed currency per se. Thus, this notification, relied upon by the Appellant, does not support their argument and their claims either. (h) The argument of the Appellant that, although in general understanding, what is being transported by the appellants is currency or cash or money, from the
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