In Re: M/s. Sanjog Steels Pvt. Ltd.,
GST
2018 (12) TMI 1156 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2019 (21) G. S. T. L. 258 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, RAJASTHAN – AAR
Dated:- 2-11-2018
AAR No. RAJ/AAR/2018-19/25
GST
NITIN WAPA AND HEMANT JAIN MEMBER
Present for the applicant: Shri Pankaj Ghiya, Advocate (Authorised representative)
Note: Under Section 100 of the CGST/RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act 2017, within a period of 30 days from the date of service of this order.
The Issue raised by M/s. Sanjog Steels Pvt. Ltd. {hereinafter the applicant} is fit to pronounce advance ruling as it falls under ambit of the Section 97 (2) (b), (e) it is given as under:
c. Determination of time and value of supply of goods or services or both;
Further, the applicant being a registered person, GSTIN is 08AAJCS7778K1ZF, as per the declarat
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hura 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. RPG. It is stated that all are registered persons under the relevant GST laws and will be paying the applicable GST on Royalty, Commission etc. as per provisions of law.
c. 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 Rs. 50 per metric tonne to M/S. Goyal Alloys Pvt. Ltd., E- 231, Phase-II, Bagru Industrial Area, Bag
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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/s. Goyal as all are registered persons and the transactions are business to business transactions with availability of full Input Tax Credit?
4. Whether the transactions between M/S. Goyal and the ultimate customer M/S. X would be covered by the provisions of Section 15 for the value of taxable supply as they are not related persons?
3. PERSONAL HEARING (PH):-
In the matter personal hearing was given to the applicant, Shri Pankaj Ghiya, Advocate, (Authorised representative) of applicant appeared for personal hearing on 10.09.2018. During the PH they reiterated t
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he 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 thereafter M/s.. RSE and M/S. Goyal as all are registered persons and the transactions are business to business transactions with availability of full Input Tax Credit?
Answer:
Yes, Provision as contained in Section 15 of CGST Act, 2017 read with Rule 28 of CGST Rules, 2017 will apply in the stated facts of the case.
4. Whether the transactions between M/s. Goyal and the ultimate customer M/s. X would be covered by the provisions of Section 15 for the value of taxable supply as they are not related persons?
Answer:
Transactions between M/s. Goyal a
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owing 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 Rs. 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 Bill would be prepared on a “Bill to Ship to” model as per the provisions of Section 10(1)(b) of the IGST Act, 2017. 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.
c. The applicant wishes to despatch the goods directly to the customer. The issue is with regard to invoicing, where it is inquired whether “Bill to – Ship to” m
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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 emphasise that only a single e-way bill is to be issued either from the supplier of goods or by third party.
In the instant case, 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.
3. The applicant has asked 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 va
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ion 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 penalty for delayed payment of any consideration for any supply; and
(e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments.
Explanation.-For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy.
(3) The value of the supply shall not include any discount which is given-
(a) before or at the time of the supply if such discount has been duly record
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i) 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 business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related.
Further, the Rule 28 of CGST Rules, 2017 is as follows:-
28. Value of supply of goods or services or both between distinct or related persons, other than through an agent.-The value of the supply of goods or services or both between distinct persons as specified in sub-section (4)
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plicant 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. Goyal and the ultimate customer i.e. M/S. X would be covered by the provisions of Section 15 of CGST Act, 2017.
6. In view of the foregoing, we rule as under:-
RULING
1. 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 applicant can issue an e-way bill in which the 'bill to' will be mentioned in the name of M/s. RSE/RPG wherea
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