In Re: ECOOL Gaming Solutions Private Limited
GST
2018 (11) TMI 886 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (19) G. S. T. L. 571 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 10-9-2018
GST-ARA-38/2018-19/B-111
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 ECOOL GAMING SOLUTIONS PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following ISSUE.
1. Whether application is liable to pay IGST under section 5 (3) of IGST act, 2017.
2. Whether Serial No.5 of Notification No. 4/2017 – Integrated Tax (Rate) is applicable on supply received by the applican
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
oss Maharashtra.
Copies of the agreement made between organizing State and applicant is attached herewith and marked as Exhibit 1)
The applicant is registered under GST primarily to pay GST under Reverse Charge Mechanism on supply of lottery tickets by the organising state.
There is no dispute that rate of GST prescribed on lottery tickets is 28% if lottery scheme is authorised by the State.
There is no dispute that reverse charge mechanism is applicable on the supply of lottery tickets by the organizing state to distributors (like applicant).
Applicable Legal Provisions-
Sec. 5 (3) of IGST Act, 2017 (similar provision in Sec. 9 of Central GST Act & Maharashtra GST Act also provides the following powers to appropriate government –
The Government nutty, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
. 11 of the Lotteries (Regulations) Act, 1998
In accordance with above notification, the applicant is paying IGST under Reverse Charge mechanism at the rate of 28% with place of supply as State of Maharashtra.
Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant's view point and submissions on issues on which the advance ruling is sought).
Grounds/Interpretation Relied on by the Applicant-
Most Respectfully Submitted –
To the Hon'ble Members of Authority for Advance Rulings, Maharashtra
1. That the applicant is registered under GST primarily to pay GST under reverse charge mechanism on supply of lottery tickets by the organising state as distributor or marketing agents of such organising state.
2. That the supply of lottery tickets are covered under RCM under IGST Act as well as under CGST/SGST Act;
3. That under the IGST Act, Government issued Notification No. 4/2017 – IGST (Rate
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
–
The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under-
(a) ………………..
(b) ………………..
(C) Where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient;
8. That the lottery tickets are notified as goods under GST and in case of online tickets, no movement is involved, therefore, applying Sec. 10 (1) (c) above, place of supply is determined as Maharashtra i.e. place where lottery tickets are made available or delivered for distribution.
9. That, therefore the place of supplier i.e. organising state is outside Maharashtra and place of supply is in Maharashtra, the transaction ought to be treated as inter-state supply as per Sec.7(1) given in Para 6 above.
10. That therefore, IGST is payable on supply of lottery tickets by the organizing State from Outside Maharashtra t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
s liable to pay IGST under Section 5(3) of IGST Act,2017;
(ii) Whether Serial No.5 of Notification No.4/2017-Intergrated Tax (Rate) is applicable on supply received by the applicant.
2. M/s. Ecool Gaming Solutions Pvt. Ltd., registered under GSTIN No.27AABCE3886A1ZT is engaged in acting as distributor or marketing agents of lottery schemes organised by the State Government of Mizoram (hereinafter referred to as 'organising state') and procure online tickets from organising state for distribution across Maharashtra. In Point No.15 of the application (Annexure-1), the applicants submitted that the lottery tickets are sold through a chain of dealers/sales terminals of applicant spread across Maharashtra. Further submitted that the applicant is registered under GST primarily to pay GST under Reverse Charge Mechanism on supply of lottery tickets by the organising state and the rate Of GST prescribed on lottery tickets is 28% if lottery scheme is authorised by the State and submitted tha
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
y tickets by the organizing state from outside Maharashtra to a dealer located in the State of Maharashtra. The applicant's interpretation that Serial No.5 of Notification No.4/ 2017 – Integrated Tax (Rate) ibid will be obsolete and useless and IGST would be never payable, is completely wrong and without any logic. IGST is payable correctly on supply of lottery tickets under Section 5(3) of IGST Act,2017 (the charging section) read with Serial No.5 of Notification No.4/2017-IGST(Rate) dated 28.062017 under reverse charge mechanism by the applicant and not by the organising state viz. State of Mizoram.
PRAYER
Considering the facts discussed in foregoing paragraphs, the question framed by the applicant in Point No.14,
(i) whether applicant is liable to pay IGST under Section 5(3) of IGST Act,2017, the answer is “Yes”.
(ii) whether Serial No.5 of Notification No.4/2017-Intergrated Tax (Rate) is applicable on supply received by the applicant, the answer is “Yes”.
04. HEARING
The ca
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Government of Mizoram (hereinafter referred as 'organizing state') and procures online tickets from organising state for distribution across Maharashtra. The lottery tickets are sold through a chain of dealers / sales terminals of applicant spread across Maharashtra.
2) We find that the applicant is paying GST under Reverse Charge Mechanism (hereinafter referred as RCM) on supply of lottery tickets by the organizing state. He is having no dispute that rate of GST prescribed on lottery tickets by way of RCM is 28% if lottery scheme is authorised by the State.
3). We find that the applicant has raised the following questions before the advance ruling authority:
i. Whether applicant is liable to pay IGST under section 5 (3) of IGST act, 2017.
ii. Whether Serial No.5 of Notification No. 4/2017 – Integrated Tax (Rate) is applicable on supply received by the applicant.
4) We find that Section 5(3) of the IGST Act reads as under:-
Section 5(3) -The Government may, on the recommendatio
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
escription of goods in respect of which Integrated Tax shall be paid on Reverse Charge basis by the recipient of the Inter-State supply of such goods.
We find the 'Lottery' is covered under this Notification which is as under:-
Sr.No.
Tariff item, sub-heading or chapter
Description of Goods
Supplier of Goods
Recipient of Goods
5.
Supply of lottery.
State Government, Union Territory or any local authority
Lottery distributor or selling agent. Explanation. For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of Sec. 11 of the Lotteries (Regulations) Act, 1998
In the present case, we clearly find that the supplier of Lottery in the present case is the State Government of Mizoram and the recipient of supply i.e. Lottery distributor or Agent, is the applicant in the present case who is located in Maharashtra and the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =