2018 (12) TMI 1156 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – TMI – Supply – e-way bill – supply from M/s. SSPL to M/s. X – “Bill to Ship to” mode – Section 10(1) (b) of IGST Act, 2017 – “ship to” of ultimate customer M/s. X – input tax credit – related person.
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Held that:- The cycle of supply of goods from the applicant to the final customer, involves four persons. i.e. the applicant, M/s. RSE/RPG, M/s. Goyal and the M/s. X – Section 10(1)(b) of IGST Act, 2017 does nowhere limit the transaction to only three parties/ persons. The said section only contemplates about role of ‘third party’ and declaration of ‘principal place of business’. Therefore, the supply from M/s. SSPL to M/S. X on a “Bill to Ship to” mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible.
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The Press Note of ministry of Finance on “Issues regarding Bill to Ship to for e-way bill under CGST rules 2017” dated 23.04.2018 clearly emphasise that only a single e-way bill is to be issued
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Ruling:- The supply from M/s. SSPL to M/s. X on a “Bill to Ship to” mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible.
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The applicant can issue an e-way bill in which the ‘bill to’ will be mentioned in the name of M/s. RSE/RPG whereas ‘ship to’ would be in the name of final customer i.e. M/s. X.
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The provisions of Section 15 of the CGST Act, 2017 read with Rule 28 of CGST Rules, 2017 and in particular the second proviso to Rule 28 would apply for the value of supply for the transactions between M/s. SSPL and M/s. RSE with availability of full Input Tax Credit.
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The transactions between M/s. Goyal and M/s. X (the ultimate customer) would be covered under the provisions of Section 15 as both are unrelated persons. (as declared in submissions by the applicant). – AAR No. RAJ/AAR/2018-19/25 Dated:- 2-11-2018 – NITIN WAPA AND HEMANT JAIN MEMBER Present for the applicant: Shri Pankaj Ghiya, Advocate (Authorised representative) Note: Under Sectio
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aipur, Rajasthan -303007. The Applicant is manufacturing TMT Steel Bars in its own brand name namely Sanjog Sona TMT 85 Jindal TMT (under license from Jindal Rolling Mills Ltd.) and is supplying it directly to the Customers which are registered. Apart from it the Applicant is also manufacturing TMT Steel Bars under the brand name of Rathi Powertech and for the sale of the said goods, the sale procedure due to business reasons are as follows:- b. The Applicant has entered into an Agreement with M/s. Rathi Steel Enterprises, Block A, 24/ 1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi- 110044 (hereinafter referred as M/s. RSE ) and M/S. Rathi Powertech Global Pvt. Ltd., Block A, 24/ 1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi-110044 (hereinafter referred as M/s. RPG ) for use of their Trademark. The Applicant will brand the TMT Steel bars manufactured by it as Rathi Powertech as per the use of Trademark Agreements entered by it with M/s. RSE and M/s. R
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It is stated that the Applicant is an associate company of M/s. Goyal. It is further submitted that the transactions are with value addition and the last transaction is with unrelated party and complying with the provisions of Section 15(1) of the CGST Act, 2017. 2. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT 1. Whether the supply from M/s. SSPL to M/s. X on a Bill to Ship to mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible? 2. Whether as per the press note dated 23.04.2018 issued in relation to the transactions of supply u/ s. IO(l)(b) of the IGST Act, 2017 the use of E-way bill in the aforesaid facts in the column of ship to of ultimate customer M/s. X is permissible ? 3. Whether in the aforesaid facts the provisions of Section 15 of the CGST Act, 2017 read with Rule 28 of CGST Rules, 2017 and in particular the second proviso to Rule 28 would apply for the value of supply for the transactions between M/s. SSPL and M/s. RSE and thereafter M/s. RSE and M
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ient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. 2. Whether as per the press note dated 23.04.2018 issued in relation to the transactions of supply u/ s. 10(1)(b) of the IGST Act, 2017 the use of E-way bill in the aforesaid facts in the column of ship to of ultimate customer M/s. X is permissible ? Answer: Yes, E way bill to be generated by M/s. SSPL showing X as shipped to and M/s. RSE as Bill to . 3. Whether in the aforesaid facts the provisions of Section 15 of the CGST Act, 2017 read with Rule 28 of CGST Rules, 2017 and in particular the second proviso to Rule 28 would apply for the value of supply for the transactions between M/s.. SSPL and M/S. RSE and there
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ng TMT Steel Bars under the brand name of Rathi Powertech and for the sale of the said goods, the sale procedure due to business reasons are as follows:- a. The Applicant has entered into an Agreement with M/s. RSE and M/s. RPG for use of their Trademark. The Applicant will brand the TMT Steel bars manufactured by it as Rathi Powertech as per the use of Trademark Agreements entered by it with M/s. RSE and M/s. RPG. b. The business conditions require that the sale of the said manufactured products by the Applicant would be in the following manner- The Applicant would be selling the manufactured goods under the Brand name Rathi Powertech to M/s. RSE. M/S RSE would be selling the said goods after adding its margin of about ₹ 50 per metric tonne to M/S Goyal. M/S Goyal will be selling the said products to various customers (hereinafter referred to as M/s. X ) as per the demand of market. The manufactured goods would be directly dispatched from the Applicant to M/s. X and the E-Way Bi
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f goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person; It is observed from the submissions made by the applicant, that the cycle of supply of goods from the applicant to the final customer, involves four persons. i.e. the applicant, M/s. RSE/RPG, M/s. Goyal and the M/s. X. We are therefore of the opinion that Section 10(1)(b) of IGST Act, 2017 does nowhere limit the transaction to only three parties/ persons. The said section only contemplates about role of third party and declaration of principal place of business . Therefore, the supply from M/s. SSPL to M/S. X on a Bill to Ship to mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible. 2. The Press Note of ministry of Finance on Issues regarding Bill to Ship to for e-way bill under CGST rules 2017 dated 23.04.2018 clearly
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plier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or pena
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hstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed. Explanation.- For the purposes of this Act,- (a) persons shall be deemed to be related persons if- (i) such persons are officers or directors of one another s businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term person also includes legal persons; (c) persons who are associated in the busine
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f the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person: Provided further that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services. We find that the TMT Steel Bars manufactured by the applicant is similar in quality of what is made by M/s. RSE/RPG, (trademark contract is emphasising on it) and therefore, the value of supply of goods can be ascertained or established in accordance with Section 15 of CGST Act read with second proviso of Rule 28 of CGST Rules, 2017 with eligibility to full Input Tax Credit.. 4. We agree with the submissions made by the applicant that relationship between M/s Goyal and M/s X is not Related party relationship in accordance with sub-section (4) and (5) of section 25 of CGST Act, 2017. Thus, the transactions between M/s.
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