In Re: Purewal Stone Crusher,
GST
2018 (10) TMI 346 – AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND – 2018 (18) G. S. T. L. 641 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND – AAR
Dated:- 11-9-2018
AAR No. 08/2018-19 In Application No. 06/2018-19
GST
VIPIN CHANDRA AND AMIT GUPTA, MEMBER
Present for the Applicant: Shri Ashwarya Sharma (Advocate)
Present for the Jurisdictional Officer: None
Note : Under Section 100(1) of the Uttarakhand Goods and Service Tax Act, 2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under Section- 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order.
1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act and the rules made thereunder filed M/s. Purewal Stone Crusher, Ramnagar (Nainital) Uttarakhand, primarily engaged in the business of
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vernment Departments (tabled in sl.no. a above) falls within the category of Exempted Government Services as mentioned under s.no. 4, 5, 6, 9, 23 & 47 of the Exemption Notification and accordingly no GST is require to be paid on such charges under s.no.5 of the RCM notification.
(c). GST applicability on penalty paid by the applicant on unaccounted stock of River Bed Material (RBM) on the orders of the District Magistrate to the Govt. department under s.no. 5 of Reverse Charge Mechanism (RCM) notification.
(d). Vehicles (Pokland, JCB, Dumper & Tipper)purchased and used by the applicant in its day to day business activities for movement of goods from one place to another would fall within the definition of Motor Vehicle under the provisions or GST law.
(e). Availability of GST Paid by the applicant at the time of purchase or repairs including spares w.r.t. Vehicles (Pokland, JCB, Dumper Tipper)used by it for movement of goods in its palace of business as Input Tax Credit.
2. Adva
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of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
4. Accordingly opportunity of personal hearing was granted to the applicant on 28.08.2018. Shri Ashwarya Sharma (Advocate) appeared for personal hearing on 28.08.2018 and submitted documents describing therein exact nature of work beine undertaken. Nobody appeared from the side of Revenue for the hearing.
5. In the present application, applicant has requested for advance ruling on different i
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n here that the Authority has earlier dealt with the same issue in the case of Forest Department wherein the advance ruling was sough: by them on the question whether GST is leviable on the “Marg Sudharan Shulk” and “Abhivahan Shulk”. The findings of the Authority in the said case is reproduce as under:
GST on “Marg Sudharan Shulk” : From the documents submitted by the applicant we find that the said “marg sudharan shulk” is charged and collected by applicant from non government, private and commercial vehicles engaged in mining work in lieu of use of forest road. Stated purpose of said “marg sudharan shulk” is for maintenance of forest road. Under GST, “the services by way of access to a roac or a bridge on payment of toll charges” are included in the list of exempted services. Further, A toll road, also known as a turnpike or tollway, is a public or private road for which a fee (or toll) is assessed for passage. It is a form of road pricing typically implemented to help recoup the c
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mpanied with a transit pass issued by forest authorities in this regard. Authority further observe that charges for carrying forest, produce through road or water are different and determined according to quality and quantity. Therefore said “Abhivahan Shulk” cannot be termed as toll tax and rather is a form of consideration received by the applicant in lieu of services provided to the person for carrying forest produce. Under GST regime under Section 2(102) services means anything other than goods and all services but for list of exempted services as provided under Chapter 99 of GST Tariff, 2017 are liable for GST. Since the services provided by the ' applicant do not find mention in the list of exempted services, therefore the applicant, is liable to pay GST @ 18% on the said “Abhivahan Shulk” under Service Code 9997 and to be treated as “other services”.
Since the facts of the present case are similar to facts earlier dealt by the authority in the case of Forest Department, the
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inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers
Central Government. State Government Union territory or local authority
Any business entity located in the taxable territory.
B. From the documents submitted by the applicant we find that the 'Fee for Ambient Air Monitoring' has to be paid to the Uttarakhand Environment Protection Control Board, Haldwani as a pollution expenses. We also find that the function of the Uttarakhand Environment Protection Control Board, Haldwani is to safeguard the environment as well as general public from the negative impact of working of stone crushers and other pollution generating plants, for which a prescribed amount of fee is levied by the State Board. We also find from the official website of Uttarakhand Environment Protection and Pollution Control Board (herein after referred 'to as UEPPCB) that it is a statutory Organization constituted under the section 4 of Water (Prevention and Cont
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sp; **
(c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund
(d) to (g)
** ** **
On going through the legal position (supra) we find that UEPPCB is not State Government however cow-red under the definition of local authority in terms of Section 2(69)(c ) of the Act.
It is established that UEPPCB is a local authority, now second question arises whether the services rendered by them are liable to GST or not. In. this context we find that the services rendered by UEPPCB is covered under Article 243 W of the Constitution and the same is extracted below:
(a) Urban planning including town planning.
(b) Regulation of land-use and construction of buildings.
(c) Planning for economic and social deve
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endered by local authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution is also covered under Notification No. 12/2017-Central Tax(Rate) dated 28':1 June' 2017 and the relevant portion of the same is reproduced as under:
Notification No.12/2017-Central Tax(Rate) dated 28th June 2017
Sl.No
Chapter heading (Tariff)
Description of Services
Rate per cent)
Condition
4.
Chapter 99
Services by Central Government, State Government Union territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution
Nil
Nil
In view of the above we find that functions, under article 243W of the Constitution, entrusted to municipality specifically mention “protection of the environment and promotion of ecological aspects”. Thus we observe that providing protection to the environment and promotion of ecological asp
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ly basis. Therefore we observe that the said “Khanij sampada sulk” is a form of consideration received by the State Department in lieu of services provided to the applicant for carrying over produce. As per Section 2(102) of the Act 'service' is defined as under:
(102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or de nomination for which a separate consideration is charged;”
We further find that services which are exempted from GST are notified vide Notification No. 12/2017-Central Tax(Rate) dated 28* June' 2017. On going through the said notification we find that in totality 81 services are exempted services which includes 12 services' provided, by government or local authority and we observe that service in question provided by the State Government does not find place in said 12
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cent)
Condition
47
Heading 9983 or Heading 9991
Services provided by the Central Government Slate Government, Union territory or local authority by way of –
(a) registration required under any law for the time being in force;
(b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, including fire license, required under any law for the time being in force.
Nil
Nil
Thus we observe that the sa d registration fee is covered Under exempted service (supra) under “Services provided by the Central Government, State Government, Union Territory or local authority by way of- (a) registration required under any law for the time being in force. Accordingly the services of registration rendered by State Transport. Office is a exempted service and no GST is payable on the same.
5.2 GST applicability on penalty paid by the applicant on unaccounted stock of River Bed Material (RBM) on the orders of the District Magist
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person, for not doing a particular act in the given circumstance.
(ii) Obligation to tolerate an act or a situation: It means to accept the occurrences or existence of an act or a particular thing, which is imposed by a condition or circumstances, in a contract, agreement or any other document which is legally enforceable by law.
(iii) Obligation to do. an act It means to perform or to do something, necessarily, prescribed in an agreement, contract/or any other document which is required under am law for the time being in force.
Further, to satisfy the definition of service (defined in section 2(102) of Act ibid), the activity should be carried out by a person for another for consideration. Here it must be emphasized that the service is 'agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act', not 'to refrain from an act, or to tolerate an act or a situation, or to do an act'.
We find that a service has been state
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are liable to GST under this supply of service as the provision of cancellation charges is already informed to the customer and, therefore, it is an agreement to the obligation to tolerate an act or situation. Further penal provisions for non-performance of service or for deficiency in service also imply consideration in lieu of tolerating an act or situation.
In view of the above we observe that the penalty is to be treated as supply of service in terms of Schedule II of the Act and is liable for GST @ 18% under Service Code '-99^ and to be treated as “other services”. However the applicant is required to discharge GST liability under reverse charge in terms of serial No. 5 of the Notification no. 13/2017 -Central Tax (Rate) dated 28 06.2017 as discussed in point A above.
5.3 Availability of GST paid by the applicant at the time of purchase or repairs including spares w.r.t Vehicles (Pokland. JCB. Dumper & Tipper)used by it for movement of goods in its palace of business as Inpu
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internal source and includes a chassis to which a body has not been attached and a trailer: but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding 4[twenty-five cubic centimetres]; 1 [twenty five cubic centimetres];”
In view of the above we observe that as per Section 17(5) (a) of the-Act, Input Tax Credit shall not be available on “motor vehicle”, unless it is used for specified purposes, viz transport, training etc, listed therein. One very important thing in the said section is the definition of the term “Motor Vehicle” under. GST It generally take it to mean that all types of vehicles, as nowadays everything is run by motor. But as per Section 2(76) of the Act the expression 'motor-vehicle' shall have the same meaning as assigned to it in clause (28) of Section 2 of the Motor Vehicle Act,
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ippers, dumpers by a mining company be allowed as input credit?
Answer: The provision of Sec. 17(5) (a) of the CGST Act, 2017 restricts credit on motor vehicle for specified purposes listed therein. Further, in terms of the provision of Section 2(76) of the CGST Act, 201 7 the expression 'motor vehicle' shall have the same meaning as assigned to it in Clause (28) of Section 2 of the Motor Vehicle Act, 1988, which does not include the mining equipment viz., tippers, dumpers. Thus, as per present provisions, the GST charged or purchase of earth moving machinery including tippers, dumpers used for transportation of goods by a mining company will be allowed as input credit.
ORDER
(i) “Abhivahan Shulk” is different from toll tax and is covered under Service Code 9997, and to be treated as “other services” and is liable for GST. The applicant is liable to pay GST a 18% as on date on the same under reverse charge in terms of Serial No. 5 of the Notification no. 13/2017 – Central T
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