In Re: M/s. Synthite Industries
GST
2018 (11) TMI 403 – AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH – 2018 (19) G. S. T. L. 142 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH – AAR
Dated:- 20-8-2018
AAR/AP/8(GST)/2018 in Application No. AAR/13(GST)/2018
GST
SRI. J.V.M SARMA AND SRI. AMARESH KUMAR, MEMBER
Present for the Applicant: Sri. Sri. P. Chaitanya (Authorized Representative)
Present for the Jurisdictional Officer: Received Remarks
Note: Under Section 100 of the APGST Act'2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under section 99 of APGST Act'2017, within a period of 30 days from the date of service of this order.
M/s. SYNTHITE INDUSTRIES LIMITED, GST: 37AADCS5616E1ZG, Survey No. 42/4B 542/1, Tammavam, Medarametla, Bodduvanipalem Mandal Prakasam District, Andhra Pradesh 523212, Andhra Pradesh, India(hereinafter also referred as applicant-job worker), having GSTIN: 37AADCS5616E1Z
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by his Principal- foreign customer at free of cost and the processed output will be exported to them. The goods contains caffeine which is being removed by the applicant-job worker through extraction process. The de-caffeinated goods will be exported to the Principal as per their requirement and instructions.
4. The applicant sought for clarification on the following issues :-
* Whether the process of providing job work service to foreign customer as explained above is taxable under GST. Is such transaction attracts GST?
* If applicable to GST, whether they have to pay IGST or SGST+CGST?.
* Is the job work service provided by them is exempted from service fax under Mega exemption list as per Notification No. 25/2012 dated 20.06.20 72 and not chargeable to GST?
5. This application is forwarded to the jurisdictional officer i.e Superintendent, Central Board of Excise & Customs, Ongole Range, apart from marking a copy to the Assistant Commissioner (ST), Ongole, to offer their rem
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worker is required to carry out the process specified by the principal, on the goods.”
With regard to IGST liability, Sec. 13 of IGST Act, 2017 reads as under:-
13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.
(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:
Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.
(3) The place of supply of the following services shall be the location where the services are actually performed, namely:-
(a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person act
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al is supplied by the foreign Principal to the factory premises of the applicant-job worker, and after the process, the de-caffeinated tea will be exported to the Principal ( i.e., to Germany) as per the instructions entered at the time of agreement.
Question No. 1 for clarification:
* Whether the process of providing job work service to foreign customer as explained above is faxable under GST. Is such transaction attracts GST?
With regard to the process of providing job work service by the applicant to the foreign principal, shall be classified under the HSN Code services Heading 9988, which reads as under:
“9983 – Manufacturing services on physical inputs owned by others The services included under Heading 9988 are performed on physical inputs owned by units other than the units providing the service. As such, they are characterized as outsourced portions of a manufacturing process or a complete outsourced manufacturing process. Since this Heading covers manufacturing services,
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Act 20 1 7 which reads as under:-
13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.
(3) The place of supply of the following services shall be the location where the services are actually performed, namely:-
(a) services supplied jn respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or
……….”
Hence, the place of supply for this transaction is location of the service where actually performed i.e., business premises of the applicant which is located in the State of Andhra Pradesh. Hence the tax liability under SGST Act/CGST Act 2017 only applies.
Question No.3 for clarification:
* Is the job work service provided by them is exempted from service tax under Mega exemption list as per Notification No. 25/2012 dated 20.06.2012 and not chargeable to GS
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