Goods and Services Tax

M/s. Kasturi & Sons Ltd. Versus Principal Commissioner of GST & Central Excise Chennai North Commissionerate
Service Tax
2018 (7) TMI 702 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 2-7-2018
ST/Misc. /40867/2017 and ST/40543/2017 – Final Order No. 41939/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial)
Shri T.R. Ramesh, Advocate for the Appellant
Shri R. Subramaniam, AC (AR) for the Respondent
ORDER
Brief facts are that the appellants is a publisher of newspapers 'The Hindu, Business Line' and magazines such as 'Front Line' and 'Sports Star' and also engaged in providing various other services. During the course of audit, it was observed that the appellant had conducted various competitive programmes for kids and students in the field of painting and quiz competition etc. They had received sponsorship from various sponsors for conducting the above programme and collected service tax for the sponsorship services provided by them. It appeared that

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or decorator service, quiz master service etc. were availed for conducting events such as quiz competition, painting competition etc. The appellant had provided sponsorship services for conducting all these events. By mistake, the appellant had collected the service tax in respect of sponsorship service but had remitted the same to the Central Government. The department now alleges that the input services availed for providing the sponsorship services are not eligible for credit. Merely because the appellant had wrongly discharged the service tax on sponsorship services instead of the service recipient, the input services cannot be held to be ineligible for credit. Since the sponsorship services are taxable services, for which the input services were used by the appellant, the department has wrongly denied the credit. He submitted that there are several decision which have held that even though the process does not amount to manufacture, the credit availed on the inputs cannot be denie

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ent of service tax. At the most, it was only an erroneous payment of service tax on the part of the appellant. Instead of the service tax being discharged by the service recipient in the case of sponsorship services, the appellant discharged the service tax by collecting the same from the service recipient. The input services were used for the output services and therefore the credit availed is eligible.
3. The ld. AR Shri R.Subramaniam supported the findings in the impugned order. He submitted that the appellant is not liable to pay service tax on sponsorship services. The service recipient ought to have paid the same. The appellant has wrongly collected the service tax on sponsorship services and utilized the credit on various input services to discharge the payment of service on sponsorship service. Thus, the input services used for providing the output service namely sponsorship services are not eligible for credit. He relied on the decision of the Tribunal in the case of Jaipur I

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s not paid the service tax on these input services nor is there a case that they are not used for providing sponsorship service. The only allegation is that the appellant ought not to have collected the service tax on sponsorship service. Generally, it is the output service provider who has to pay the service tax and in some cases like sponsorship services, the Service Tax Rules provide that the liability to pay service tax is upon the service recipient. Appellant has collected service tax wrongly from service recipient and paid to Central Government instead of the service recipient paying it directly to Central Government for sponsorship services. For the mere same reason, it is alleged that the credit has been wrongly availed on various input services used for providing sponsorship services. In para 3.15 of the adjudication order, it is brought out that the appellant has declared the credit of service tax paid on input services in their ST-3 returns. Thus, the credit availed as well

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In Re : M/s JSW Energy Limited
GST
2018 (7) TMI 511 – APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (14) G. S. T. L. 571 (App. A. A. R. – GST), [2019] 69 G S.T.R. 88 (AAAR)
APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAAR
Dated:- 2-7-2018
MAH/AAAR/SS-RJ/01/2018-19
GST
Rajiv Jalota (Member) and Smt. Sungita Sharma, (Member)
PROCEEDINGS
(under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter

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Appellant's power plant is divided into four units and the said Job Work Arrangement is pertaining to Unit III and Unit IV of the power plant. These are in the nature of captive power units and by virtue of the arrangement, JSL would be construed as Principal and JEL would be working as Job Worker.
D In terms of the proposed arrangement, JSL would procure coal or any other inputs (herein after collectively referred to as 'inputs') and supply the same to the Appellant for the purpose of carrying out the activity of generation of power. On receipt of the same, Appellant would, undertake certain processes to convert the said inputs into power. The detailed process is explained in Exhibit – 1 to the Appeal. The power generated from the aforesaid process on inputs will be supplied back to JSL for which the Appellant would be receiving job work charges as per the rate that would be agreed as per the Job Work Arrangement. During the whole process under the Job Work Agreement, the

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lso made additional written submissions on 20.02.2018 reiterating all the submissions made in the application and certain additional grounds including response to queries raised by AAR. A copy of the additional submissions was enclosed as Exhibit – 3 to the Appeal.
Order passed by AAR
H. The Order dated 05.03.2018, received by the appellant on 09.03.2018, has been passed by AAR holding that the proposed transaction amounts to manufacture and therefore it would not qualify as 'job work' under GST on account of the following:
i. The proposed activity of the Appellant is manufacture which cannot be read into the words 'treatment or process' as found in the definition of 'job work'.
ii. The Impugned Order, relying on the decision of Manganese Ore India Ltd. V. State of M.P. [(2017) 1 SSC 81] has held that intent of the legislation is not to cover such 'treatment or process' into the ambit of the 'job work' which results into a distinct commodit

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–
GROUNDS OF APPEAL
JOB WORK WIDER IN SCOPE TO ALSO INCLUDE MANUFACTURE
The AAR has grossly erred in passing the Impugned Order in law while attempting to interpret job work as a process or treatment which does not result in manufacture of a distinct commodity.
2. On perusal of the relevant provisions of CGST Act, it is submitted that if all of the following conditions are fulfilled, the transaction would qualify as an activity of job work and consequently the Principal will be allowed to send the goods without payment of tax viz:
 (i) Treatment or process should be undertaken by a person;
 (ii) Such treatment or process should be on goods; and
 (iii) These goods should belong to another registered person
3. The Impugned Order does not dispute the fact that the conditions stated above are getting fulfilled in respect of the transaction between JSL and the Appellant, except condition (i) as stated above. The entire edifice on which the Impugned Order stands is

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nput goods into a new commodity. For this proportion, we draw support from the decision of the Hon. Supreme Court in Manganese Ore India Ltd. v. State of M.P., (2017) 1 SCC 81 : 2016 SCC Online SC 1280 which has very lucidly explained the meaning of the term 'treatment and processing'.
……..
……..
Page 10 of the Impugned Order after the definition of 'manufacture' under the CGST Act,
As can be seen the definition itself says that the emergence of a new product from the processing of the inputs would be a manufactured product. In the Instant case the end product i.e. “electricity” has a distinct name, character and use than the inputs i.e. “coal”. Thus, when the Legislature has provided for the definition of 'job work' as well as 'manufacture', the meaning as understood by the definition of 'manufacture' cannot be read into the words 'treatment or process' as found in the definition of 'job work'. 'Treatment',

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” means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term “manufacturer” shall be construed accordingly;”
5. The harmonious interpretation of the above definitions, in order to understand the meaning of job work' can be explained by way of the following diagram –
6. On perusal of the definition as illustrated by way of above diagram, it is evident that every processing activity when carried out on the raw material or inputs belonging to another person will qualify as job work. However, when such job work results in emergence of a new and distinct commodity, only then it falls within the ambit of manufacture. Therefore, the way terms have been defined under the CGST Act, manufacturing activity is a sub-set of job work. That is to say if a person undertakes processing of raw material / inputs belonging to another person then the said activity would qualify as job work, which if result

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VAT Credit Rules, 2004 ('Cenvat Rules').
9. The Appellant wants to place reliance on the FAQ on GST issued by the CBEC updated till January 1, 2018, in which CBEC clarified that the definition under CGST Act is much wider than the one given under the Notification. The copy of the FAQ is enclosed with the Appeal as Exhibit – 5. The relevant extract of the FAQ is reproduced herein:
“Q1. What is job work?
Ans. Job work means undertaking any treatment or process by a person on goods belonging to another registered taxable person. The person who is treating or processing the goods belonging to other person is called 'job worker' and the person to whom the goods belongs is called 'principal'.
This definition is much wider than the one given in Notification No. 214/86 – CE dated 23rd March 1986. In the said notification, job work has been defined in such a manner so as to ensure that the activity of job work must amount to manufacture. Thus, the definition of job w

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processing. Many facilities, procedural concessions have been given to the job workers as well as the principal supplier who sends goods for job-work. The whole idea is to make the principal responsible for meeting compliances on behalf of the job-worker on the goods processed by him (job-worker), considering the fact that typically the job-workers are small persons who are unable to comply with the discrete provisions of the law.
The GST Act makes special provisions with regard to removal of goods for job-work and receiving back the goods after processing from the job-worker without the payment of GST. The benefit of these provisions shall be available both to the principal and the job-worker.”
11. Given the above, it is evident that CBEC itself emphasize on the widening of the scope of job work under the GST Regime which inter-alia includes every kind of processing activity, whether resulting into manufacture or not. Therefore, taking any contrary view would lead to an incongruous

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to manufacture, and just because activities undertaken result in a new commodity, it cannot be said that there was no job work involved. The relevant paragraph is reproduced below
“We observe that there is no dispute by the Revenue on the duty payments made on the finished products, namely, hydraulic power pocks by the appellant which were cleared from the job workers' premises. There is also no allegation of undervaluation of the finished products either in the show cause notice nor any such findings has been recorded in the impugned order. Once the finished product has correctly discharged the liability there cannot be any leakage of revenue. Cenvat credit envisages that duty/tax paid on the input/input services will be available for discharge of duty liability on the finished products. It is not in dispute that the inputs were used in the fabrication/assembly of the finished products. Similarly, it is also not in dispute thot finished products did emerge at the job-workers'

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of the Hon'ble Tribunal is clearly applicable in the facts of the present case in as much as the Impugned Order has held that the proposed activity of the Appellant cannot amount to job work since the activities undertaken by the Appellant would result into a distinct commodity. In view of the above decision, the proposed activity would amount to job work even if it amounts to manufacture.
14. In case of Commissioner of Central Excise, Mumbai-IV vs Ruby Mills Ltd. (2016 (343) E.L.T. 395 (Tri. Mumbai)) while considering the valuation method for an activity undertaken by the job worker, the Mumbai Bench of Tribunal upheld findings of the First Appellant Authority that job worker may undertake an activity which results in manufacture. The relevant extract of the judgment is reproduced below:
“11. We also find that the first appellate authority has correctly enunciated the law as to the activity of job work as to how it should be understood and the valuation of the said goods to be

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is submitted that the processing activity carried out on inputs owned by another person amounts to job work even if the resultant product is a distinct commodity.
ELECTRICITY CAN BE GENERATED ON JOB WORK IS A SETTLED LAW
17. The Appellant submits that it is well settled inter-alia in terms of the below mentioned judgments of the Courts that electricity being intermediate goods used in the manufacture of final product, can be generated on job work basis:
* Commissioner of Central Excise, Nagpur vs Indorama Textiles Ltd. (2010 (260) ELT 382 (Bom HC))
* Haldia Petrochemicals Ltd vs CCE, Haldia (2006(197) ELT 97 (Tri.- Delhi))
* Sanghl Industries Limited vs CCE, Rajkot (2006(206) ELT 575 (Tri.- Delhi))
* Sanghi Industries Limited vs CCE, Rajkot (2014(302) ELT 564 (Trl.- Ahmd.))
18. The above judgments cover Instances where materials (such as naphtha, light diesel oil, furnace oil, etc.) were supplied to the job worker for carrying out a specified process for the purpose of gener

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ate goods. There is no challenge to understanding/agreement between Respondent No. 1 and M/s. IRSL. We do not find anything perverse in findings recorded in paragraph 6 of the order No. A/67/2007/EB-C-ll, dated 31-1-2007 in Appeal No. E/3701/05-Mum. These reasons hold good even for second matter.”
19. Further the Supreme Court dismissed the appeal petition filed by the Commissioner of Central Excise Nagpur against the order of the Hon'ble Bombay High Court in the matter of Indorama Textiles Ltd (supra) – Commissioner of Central Excise, Nagpur vs Indorama Textiles Ltd.( 2010(260) E.L.T. A83(SC))
CGST Act does not provide for Restrictive Meaning of the word 'process' used in the Definition of Job Work
20. The Impugned Order has held that the word 'process' used in the definition of job work has to be read narrowly so as to exclude activities resulting in manufacture. The Appellant submits that wherever the intention of the law maker is to give a restricted meaning

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tute a composite supply”
21. The 'job work' definition does not provide any exclusion to 'manufacture' and hence should not be read narrowly. It is a settled law that the Act should be read as it is written without adding words not mentioned thereunder.
22. in view of the above submissions, the findings and assertions made by the Impugned Order as regards the differential meaning being assigned to the term 'process' used in job work as well as manufacture is based on erroneous understanding of fact and law and is unsustainable.
Commercial Parlance and Dictionary Meaning
23. The Appellant submits that since the terms 'treatment' or 'process' have not been defined under the GST legislation, reference is sought to the dictionary meaning which explain the said terms and are reproduced as follows:
Process
* a natural or involuntary operation or series of changes; handle or deal with by a particular process (The Oxford English Reference Dictionary 1

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g to Oxford Dictionary one of the meanings of the word process' is “a continuous and regular action or succession of actions taking place or carried on in a definite manner and leading to the accomplishment of some result.” The activity contemplated by the definition is perfectly general requiring only the continuous or quick succession. It is not one of the requisites that the activity should involve some operation on some material in order to its conversion to some particular stage. There is nothing in the natural meaning of the word 'process' to exclude its application to handling. There may be a process which consists only in handling and there may be a process which involves no handling or not merely handling but use or also use. It may be a process involving the handling of the material and it need not be a process involving the use of material…
25. In light of the above cited meanings and judicial interpretation, it is submitted that the term process is wide enoug

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ent relied upon in the Impugned Order, suggests a different application of the word 'process' very specific to the term used in relation to the mining activity and has no relevance in the current context.
28. It is a well settled position in law inter alia by the judgment of the Hon'ble Supreme Court in Bharat Petroleum Corporation Ltd. & Another vs. N.R. Vairamani & Another (AIR 2004 SC 4778) that reliance cannot be placed on decisions without discussing as to how the factual situation of a case fits in with the facts of the decision on which reliance is placed. Further in the case of Pan Parag India Ltd vs. DGFT (2016 (3 36) ELT 625 (Del))it was held that it is a settled law that precedent decisions are binding only when factual situation therein fits case under decision. Further, the observations of Courts must be read in the context in which they appear to have been stated.
29. The factual matrix in the Manganese Ores India Limited (Supra) can clearly be distinguished

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ps. In the Explanation, 'processing' is used in conjunction with other words i.e. crushing, treating and transporting and therefore, it was preferred to interpret the said word in the Explanation with reference to the words before and after it i.e. to be understood with the associated words. Further, it was held that the words 'crushing', 'treating' and 'transporting' are words of narrower significance and hence, the word 'processing' used between these words should also be given a narrower significance.
31. The Impugned Order fails to recognize the fact that in the same judgment the Hon'ble Apex Court held that the word 'processing' can have a wider meaning which would also include manufacturing. However, in the context of that case the word 'processing' has to be interpreted as per the Mines Act, 1952 and therefore will be restricted to the sense conveyed by the words 'crushing', 'treating' and 'transpor

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product…[Para 20)”
32. Therefore, it is submitted that the Impugned Order has erred in referring to the above decision, which was rendered in different factual and legal context while considering diverse issues, and which do not advance or support the findings in the Impugned Order.
Without prejudice, the HSN Code applicable to certain Job Work uses the word 'Manufacturing Service'
33. Without prejudice to any other submissions, the Impugned Order failed to appreciate that the HSN Code applicable for the certain specified job work activity clearly uses the word 'Manufacturing services'.
34. The applicable rate of tax in respect of services are provided in the Notification No. 11/ 2017 -Central Tax (Rate) dated 28.06.2017 (as amended from time to time) ('Rate Notification'). For certain specified job work services, the applicable HSN Code under the Rate Notification is '9988'.
SI No.
Chapter, Section or “heading
Description of Service
Rate (per

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ds falling under Chapter 48 or 49, which attract CGST @ 6 per cent.
6
  –
(iii)…
2.5
–
(iv) Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ii), (iia) and (iii) above.
9
  –
35. It is submitted that the above mentioned HSN Code describe the service as “Manufacturing services on physical inputs (goods) owned by others” which inter-alia includes various different kind of job work services. The description itself indicates that the activity undertaken by the job worker can amount to manufacture. Considering this, it is the submission of the Appellant that the Impugned Order holding that proposed activity of the Appellant does not amount to job work since it amounts to manufacture is bad in law and must be set aside.
36. In view of the various submissions made above and on the harmonious reading of the CBEC clarifications, judgments cited in earlier paragraphs to this Appeal, definitions under CGST Act and dictionary meanings

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ifies as job work even if it amounts to manufacture may be confirmed.
any other consequential relief that this Appellate Authority may deem proper be granted.
Hearing and submissions
37. The representative who appeared on behalf of the appellant during the hearing proceedings deposed that AAR has misinterpreted the definition of Job work and construed that the treatment and process undertaken by a person on goods belonging to the other registered person should not result into distinct manufactured commodity and accordingly concluded that electricity generated by the appellant using the coal supplied by JSL is a different commodity with different name and use, thereby rendering the entire process/activities undertaken by the appellant as manufacture in terms of the definition as provided under Section 2(72) of the CGST Act, 2017. Thus, the process/treatment performed by the appellant on the coal supplied by JSL would not be covered under the Job work. The Appellant's representati

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osed;
(i) that processing of raw materials/inputs belonging to another registered person under job work procedure may or may not result into the emergence of new commodity.
(ii) That the definition of the 'Job work' under the GST Act, 2017 has widened the scope of the activities covered under the 'Job work' as compared to the definition provided under Notification No. 214/86-C.Ex. dated 23.03.1986
(iii) That any treatment or process by a person on goods belonging to another registered person is 'Job work', the person who treats or processes the inputs is called 'Job worker' and person to whom the goods belong is called 'Principal';
(iv) That Job work sector includes outsourced activities that may or may not culminate into manufacture
The appellant in their support referred to 2nd Edition : 31st March, 2017 (updated as on 1st January, 2018 of FAQ on GST issued by CBIC and the clarification issued by CBEC on Job work)
The appellant further de

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 (v) Sanghi Ind. Ltd. Vs. CCE, Rajkot (Tri-Ahmd.)
The above four judgements cover instances where goods/materials such as Naphtha, Light Diesel Oil, Furnace Oil etc. were supplied to the job worker for the purpose of generation of electricity
The appellant further referred to the following judgements
 (i) Collector of C.Ex. V/s. Rajasthan State Chemical Works (S.C.)
Para 2B – Bharat Petroleum, Pan Parag
Also, the representative of the appellant deposed that service codes have been given in the Chapter 99 of GST Tariff – Services and In Section 8, Heading No. 9988 at Sr.No. (iv), the services have been described as “manufacturing services” on physical inputs (goods) owned by others. During the course of hearing, when being asked about the present system for supply of electricity to their manufacturing units and whether they have any captive coal-run power plant in their manufacturing units for generation and supply of electricity, the appellant's representative

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nt's representative concluded his arguments with prayer that the impugned order passed by the Authority for Advance Ruling be set aside and appeal may be allowed.
38. Shri K.K. Srivastava, Addl. Commissioner, Kolhapur, CGST & C. Ex. Commissionerate who appeared on behalf of the concerned/jurisdictional Commissionerate representative contended the submissions/arguments offered by the appellant's representative saying that M/s. JEL are the manufacturer of electricity where coal is one of the main raw materials which is used as fuel in their coal fired power plant, whereas M/s. JSL are the manufacturer of steel and coal is not an input for the manufacture of steel as per the Standard Input Output Norms specified as per the Import Export Policy. The jurisdictional officer deposed that M/s. JSL are not having 'in-house coal fired power plant' for production of electricity for captive consumption and hence coal cannot be considered as input and hence cannot be sent for furth

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f the coal i.e the input has been completely lost. He further deposed that the coal neither being the raw material for the manufacture of steel or steel products by M/s. JSL nor being used as inputs for generation of electricity in the in-house coal fired power plant for captive consumption as discussed above does not qualify to be 'goods' for furtherance of business of M/s. JSL and hence cannot be supplied to M/s. JEL on the Job work basis.
39. As per the deposition made before the appellate authority during the hearing dated 19.06.2018, the appellant vide their letter dated 22.06.2018 made further additional submissions which are as under:
 (1) The appellant inter-alia submitted that the Power Plant owned by them where the proposed Job work activity on the coal supplied by M/s. JSL Is to be undertaken Is a Captive Power Plant of JSW group. In respect of this, the appellant have enclosed the following documents
(i) A copy of the Board Resolutions dated 03.03.2011 where

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r sent back to the Principal or supplied by the appellant as per the direction of JSL.
 (4) They further submitted that coal Is an Input for JSL placing their reliance upon the definition of the input as provided under Section 2 (59) of the CGST Act, 2017.
 (5) In para 5.6, they further submitted that JSL has its own power plants for generation of electricity from different fuels at various locations including Dolvi, Maharashtra and Vijaynagar, Karnataka.
 (6) In para 5.7, they submitted that the definition of the term 'inputs', read with the definition of business as provided in the CGST Act, 2017 indicates that scope of the term 'input' is very wide and would cover all goods used in the course or furtherance of business. To substantiate this claim, they cited various court and tribunal judgments.
 (7) In para 5.9,they relied upon various Courts and tribunals judgments wherein credit have been allowed on inputs which have been used in the genera

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. 639(Tri.- Bang.)
 (d) Bharat Commerce and Industries Ltd. V/s. Collector [1997 (94) E.L.T. A136]
Discussions
40. We have heard both the parties and gone through the submissions made by them. The Issue before us is to decide whether the activity undertaken by M/s JEL on behalf of M/s JSL is job work or otherwise. The answers to other questions will follow.
41. The Authority for Advance Ruling in their order dt. 05.03.2018 has decided that since M/s JSL are not the applicant in the proceedings, the ruling sought by M/s JEL on behalf of M/s JSL was not entertained. In respect of ruling sought by the applicant i.e. M/s JEL regarding conversion of coal (to be supplied by M/s JSL) into electricity, the Authority decided the same as supply of goods and not as job work. The main ground for decision of the Authority lies in the fact that definition of Job Work covers 'process and Treatment' on goods, whereas in the instant case the operations carried out by M/s JEL are beyond

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r not. Here, we are inclined to agree with the formulation laid down vide C. B.E.& C. Circular No. 38/12/2018 dt. 26.03.2018 on issues related to Job Work vide para 5, that
“…….the job work is expected to work on the goods sent by the principal and whether the activity is covered within the scope of job work or not would have to be determined on the basis of facts and circumstances of each case (emphasis supplied).
We now proceed further in the matter to examine whether the activity proposed to be conducted by M/S JEL on the goods supplied by M/s JSL would be covered under Job Work or not.
44. The Applicant has cited various judgments in support of their argument that the job work involved manufacturing and credit of duty was allowed even in respect of the inputs utilized in manufacture of intermediate goods used in the manufacture of final product. In this case, M/s. JSL are manufacture of Steel and steel products and M/s JEL are engaged in production of electricity, using coal

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and Rule 45 of the CGST Rules. In terms of Section 143(1)(a):
 (1) A registered person (hereafter in this section referred to as the “principal”) may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall,-
 (a) bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax.
On a harmonious reading of the definition of Job Work and the procedure for the same, it is construed that the principal will send the inputs to the job worker for conducting any treatment/process/ which may, or may not amount to manufacture) and shall bring back the same after completion of job work or otherwise Therefore the

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l submission have provided the copies of Bills of Entry evidencing the Import of Coal for Dolvi Plant of M/s. JSL as well as Karnataka plant. A perusal of the said two documents leads us to understand that, though the two coal Items are geologically same, they are two different types, and that the Coal imported by M/s JSL Is coking coal and has a different usages compared to steam coal, being used by power plants for generation of electricity which is much cheaper as well. This shows that the inputs being utilized by M/s JSL for the manufacture of their final product i.e. Steel are not the same which they intend to send to M/s JEL for undertaking process on the same. Rather they are proposing to procure the steam coal which are inputs for the power plant of M/s JEL, the job worker and Intend to avail the credit of duty on the same which is otherwise not available to M/s JEL as their final product, i.e. electricity, does not fall in the ambit of the GST law.
47. Assuming that the steam

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h may change at any point of time, thus affecting the uninterrupted supply of such goods. This clearly shows that Principal will not be in a position to bring back the inputs after processing by the proposed job-worker independent of a third person or entity, who in turn is in the role of regulator and there is no option with the Principal but to follow the laid down regulations. So much so, the return of the inputs after processing is not guaranteed if not allowed by the regulator or third person/entity. Further, no one-to-one co-relation can be established vis-a-vis the receipt of the processed goods due to involvement of the third party. Under the facts as brought out above, the condition of the definition of Job Work involving only two persons is not fulfilled. Nor is the condition of the Section 143(1)(a), namely to bring back the inputs to the premises of the principal, fulfilled.
49. The facts of the case cited by the Appellant in the matter of M/s Essar Steel Ltd. said to havi

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rk means goods produced out of materials supplied by customer and where the job workers contribute mainly their labour and skill though done with the help of their own tools, gadgets or machinery – But when the job worker contributes his own raw material to the article supplied by the customers and manufactures different goods it does not amount to job work however addition or application of minor items by job worker would not detract it being a job work – Like a tailor stitching a shirt or suit out of the cloth supplied by his customer, may use his own buttons, thread and lining cloth and such ah activity would amount to job work.”
51. In para 17 of the said judgment, Hon'ble Court has explained the definition of Job work which is reproduced below-
“Now, what does the expression 'job work' mean? On this question, the Explanation is not of much assistance. The Concise Oxford Dictionary assigns several meanings to the expression job' but the relevant meaning having reg

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ers, soles etc. by the customer and the factory applies its own thread or bonding material and manufactures shoes therefrom and supplies them back to the customer, charging only for its work. The nature of its work does not cease to be job-work. Indeed, this aspect has been stressed in all the decisions of High Courts referred to hereinbefore. ”
Thus what we see from the above observations is that, the Supreme Court has held that additions or application of minor items is permissible in job work. But such is not the case here.
Also, In the E-flier published by the CBEC on 'job work', it is mentioned that' the whole ides in job work is to make the principal responsible for meeting compliances on behalf of the job worker of the goods processed by him (job worker) considering the fact that typically the Job workers are small persons who are unable to comply with the discrete provisions of the law. Therefore, we hold that job work on the scale as in this case before us could

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an nevertheless be seen from the details provided by the appellant that coal is not the only input used for the production of electricity. There is large quantity of water and air being uitilized in the process. The other materials being used by the job worker are not minor solutions to the Inputs and all Inputs are not provided by the principal. Accordingly It Is seen that the process cannot be considered as Job work following the ratio of the above judgment.
53.  To elaborate further, in para 19 of the said judgment, it is observed as below:
” Now, let us look at the process involved in this appeal. All that Modipon does is to supply steel pipes. The appellant purchases guide rings and strengthening rings from the market. It fits these rings Into those steel pipes by itself or gets them fitted In another unit. Thereafter, adopters are fitted on the sides of the cops and then the plastic sleeves are fitted on the cylinders of the cops. This is not a case where the rings and the

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job work if principal sends minor inputs to the job worker and all other inputs/goods utilized in the final product are being procured/purchased by the job worker. This will defeat the very purpose and idea of job work. For example, the process where a principal sending only buttons and thread to a job worker to get the shirts manufactured by the job worker by utilizing the fabric purchased by the job worker cannot be considered as job work-in light of the above judgment of Apex Court. Similarly, In the Instant case If M/s JSL sent only water tankers to M/s JEL and received back Electricity from them on payment of job charges and cost of other raw materials like coal and air, had the process would have been called as a job work process? We are of the firm opinion that the answer is negative in view of the Apex Court judgment as only minor additions by the job worker on the inputs provided by the principal is envisaged in the law.
54. The various judgments relied upon by the Appellant

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he steel plant and after utilization of the some of it, remaining electricity was transmitted to the grid of Gujarat State Electricity Board. So, there was no regulation or third party on the inputs to reach the Principal after processing of the same.
(ii) Commissioner of C. Ex. Nagpur v/s IndoramaTextiles Ltd. 2010(260)ELT 382(Bom.):
The principal argument here was that furnace oil was never received in the factory of production but sent directly to the job worker and as Indo Rama Textiles did not have a captive power plant, CENVAT credit was not available. The SC referred to the earlier decision In Vikram cement (2006(194 ELT 3) (SC) and held that 'within the factory of production' can be interpreted liberally Therefore, it be noted that the primary issue here was not whether the activity is a job work or not. Also, it was never contended by the revenue that the said activity is not job work so the Court had no occasion to decide the same ( Para 8 of the order). As such t

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ase of Haldia petrochemicals the question was of the eligibility of Cenvat credit on inputs used in the generation of team and electricity. The Naphtha was sent to a power plant (which was a joint venture of Haldia with Larsen and Toubro) .The credit was sought to be denied on the ground that the that duty is only allowed on inputs used in generation of electricity or steam used for manufacture of the final product within the factory of production. This issue is not relevant as in the present case.
The other issue was whether credit is allowed on the basis that the products are supplied to job worker namely the power plant. So as such the issue was of admissibility of credit. Also the definition of 'input' during the relevant time covered goods used in fuel or for generation of electricity, which was the basis on which the judgement was given, as is clearly evident from Paragraph 22 of the order.
Also, as per para 2 of the said judgment “The principal raw material for manuf

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) ELT 213 Tri Mumbai/
c) Jaypee Rewa Cement vs Commissioner Of Central Excise (133 ELT 3 (sc),
d) Collector of Excise vs Solaris Chemtechf 2007 214 ELT 481 (SC)/
e) Gujarat State Fertilizers ( 2008 229 ELT 9 SC)/
f) Grasim Industries 2002 (147 ELT 190)
the Issue whether a particular activity is a job work or not was at all not before the Court. The only issue was of admissibility of credit.
The appellant has also relied on the Advance Ruling issued by Gujarat Authority For Advance ruling on dt. 21.03.2018 vide No. GUJ/GAAR/R/2018/7 In the matter of M/s INOX Air Products Pvt. Ltd. The facts of that case are different from the facts and circumstances of the instant case. M/s Inox Air Products Pvt. Ltd. were providing services of Job work to the principal M/s Essar from the plant located within the premises of the Principal and all the inputs viz. Atmospheric Air, Industrial water and Electricity used for manufacture of Industrial gases belonged to the principal and were suppl

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han steam coal?
(ii) How would the Principal, M/s JSL be able to bring back the inputs (after processing the same by job worker) under Section 143(1)(a) without being regulated by a third party?
(iii) What are the other inputs/materials, their quantity and value, being procured/purchased by the job worker, M/s JEL, which need to be added to the inputs supplied by the Principal for converting the same into electricity, as the Principal is not supplying all the inputs and in terms of the Judgment of Apex Court, as referred above, the job worker can not make substantial addition to the inputs of the Principal to qualify for the process as job work.
In light of above, we have no doubt to conclude that the activity undertaken by M/s JEL to convert Coal, to be supplied by M/s JSL, in electricity is not covered under the definition of Job work in terms of the CGST Act. Since goods supplied by M/s JSL will be utilized by M/s JEL in manufacture of new commodity i.e. electricity (though att

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M/s Wipro Enterprises Ltd. Versus The Commissioner of Customs, Central Excise & Service Tax, Tirupati – GST
Service Tax
2018 (7) TMI 435 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 2-7-2018
Appeal Nos. ST/30480-30481/2018 – Final Order No. A/30643-30644/2018
Service Tax
Hon'ble Mr. P. Venkata Subba Rao, Member ( Technical )
Shri R. Rajesh, for the Appellant
Shri Arun Kumar, Deputy Commissioner (AR) for the Respondent
ORDER
[ Order Per : P. Venkata Subba Rao ]
These two appeals are filed by the appellant against Order-in-Appeal No. TTD-EXCUS-000-APP-130-17-18 dated 23.02.2018 & Order-in-Appeal No. TTD-EXCUS-000-APP-131-17-18 dated 27.02.2018.
2. Heard both sides and perused the records.
3. The facts of the case in brief are that the appellants are engaged in the manufacture of Hydraulic Cylinders and are registered with Central Excise. They are also registered with the Department under service tax provisions for payment of service tax under the c

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not reconciled his accounts even after lapse of more than one year from the relevant date. It clearly shows that the assessee has willfully evaded payment of appropriate service tax and taking a chance of non-detection conducted by the Department. Accordingly, it was proposed to demand the service tax invoking the extended period along with interest. It was also proposed to impose a penalty under Section 78. After following the due process of law, the Learned Assistant Commissioner had confirmed the demands along with interest and imposed penalties under Section 75 and 78 of the Finance Act, 1994.
4. Aggrieved, the appellant filed an appeal before the Commissioner (Appeals) who upheld the Order-in-Original and dismissed the appeals. Learned Commissioner (Appeals) rejected the claim of the appellant that there was no suppression of facts and hence the proviso to Section 73(1) cannot be invoked and neither can penalty can be imposed under Section 78. He concluded with the appellant had

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the Order-in-Original and prayed that the penalty under Section 78 may be set aside.
6. The Learned Departmental Representative on the other hand, reiterated the arguments made in the Order-in-Original and Order-in-Appeal and said that the mandatory penalty under Section 78 cannot be set aside because there was a suppression of facts. He relied upon the judgement of Hon'ble High Court of Karnataka in the case of Commissioner of Customs, Mangalore Vs. Jindal Vijayanagar Steel Ltd., [2017 (346) ELT 378 (Kar.)] and relying on the judgment of the Apex Court in the case of Union of India Vs. Rajasthan Spinning & Weaving Mills [2009 (238) ELT 3 (S.C.)] wherein it was held that mandatory penalty does not get altered because of the fact that the assessee had paid the duty prior to issue of show cause notice. This judgment of the Hon'ble High Court of Karnataka was appealed against by the assessee but upheld by the Hon'ble Supreme Court. He further relied on the judgment of the Hon'ble High Co

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on, fraud, misstatement etc., with an intent to evade payment of duty would call for imposition of penalty to the extent of 100% of tax evaded. At this stage, reference can be made to Tribunal's decision in the case of wherein vide Final Order No. 41600/2017, dated 09.08.2017, the Tribunal discussed all the provisions of penalties in terms of the Finance Act, 1994 invoking the provisions of section 80 and has held that the same is not applicable in cases of suppression and fraud etc. In such circumstances, no fault can be found with the findings of the Commissioner (Appeals) order. Accordingly, appeal filed by the assessee is rejected.
In view of the above, the Learned Departmental Representative argued that the fact a lower value was declared in the ST-3 returns is sufficient invoking penalty under Section 78 of the Finance Act, 1994. This mandatory penalty does not get altered by the fact but they have paid service tax as well as interest well before the issue of show cause notice.

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In Re : M/s. Manjira Machine Builders (P) Ltd.
GST
2018 (7) TMI 389 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2018 (14) G. S. T. L. 488 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – AAR
Dated:- 2-7-2018
Advance Ruling No. TSAAR Order No. 7/2018, A. R. Com/14/2018, Dated 2nd July, 2018
GST
Mr. J. Lakshminarayana, ADDL. COMMISSIONER (State Tax) And Mr. V. Srinivas, JOINT COMMISSIONER (Central Tax)
RULING
M/s. Manjira Machine Builders (P) Ltd , Flat No. 307 & 308 , Bhanu Enclave , Sundernagar, Hyderabad-500038 has filed an application in Form GST ARA-01under Section 97(1) of TGST Act,2017 read with Rule 103 of CGST/TGST Rules, 2017and stated that all the DRDO labs and Satish Dhawan Space Centre (SDSC SHAR, ISRO< Sriharikota), Vikram Sarabhai Space Centre (VSSC, ISRO, Thiruvananthapuram), while issuing their enquiries and purchase orders, they are mentioning against the IGST/GST column that "As per Government of India, MoF (Depa

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olumn (3) of the Table , from the so much of the integrated tax leviable thereon under section 5 of the said Act, as in excess of the amount calculated at the rate of 5 per cent., when supplied to the institutions specified in the corresponding entry in column (2) of the Table, subject to the conditions specified in the corresponding entry in column (4) of the said table given in the notification.
4. In respect of such clearances effected within the State, similar Notification has been given by the Govt. of India vide Notification No. 45/2017-Central Tax (Rate) dated 14.11.2017 which exempts the goods specified in column (3) of the Table, from the so much of the central tax leviable thereon under section 9 of the said Act, as in excess of the amount calculated at the rate of 2.5 per cent., when supplied to the institutions specified in the corresponding entry in column (2) of the Table, subject to the conditions specified in the corresponding entry in column (4) of the said table give

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of goods or services or both-
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where-
(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or
(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave

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off or disposed of by way of gift or free samples; and
(i) any tax paid in accordance with the provisions of sections 74, 129 and 130.
6. However, goods and services on which concessional rate of tax is applicable are not figured in the list. Hence, the ITC is allowed on the supplies effected by paying duty at concessional rate of tax. Moreover, the supplies effected at concessional rate of duty are not exempt supplies. Hence, Input tax credit is allowable on the raw materials used for these supplies.
7. The clarification sought in the application has been examined with reference to the provisions of the CGST/TGST Act, 2017 and the Rules made there under and the notifications issued till date; and the Advance Ruling is given as under:
(i) The concessional rate of tax @ 5% as given under Notification No. 47/2017- Integrated Tax (Rate) dated 14.11.2017 is applicable only for Interstate sales i.e., on IGST and concessional rate of tax @ 2.5% CGST + 2.5% SGST is applicable for Intras

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In Re : M/s. Lyophilization Systems India Private Limited
GST
2018 (7) TMI 388 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2018 (14) G. S. T. L. 493 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – AAR
Dated:- 2-7-2018
A. R. Com/8/2018 And TSAAR Order No. 5/2018
GST
Mr. J. Lakshminarayana, ADDL. COMMISSIONER (State Tax) And Mr. V. Srinivas, JOINT COMMISSIONER (Central Tax)
RULING
M/s. Lyophilization Systems India Private Limited, Plot No.26/27, Aleap Industrial Estate, Opp. JNTU Road, Near Pragathi nagar, Kukatpally, Hyderabad (GSTIN No.36AAACL8746M1ZY) has filed an application in Form GST ARA-01under Section 97(1) of TGST Act,2017 read with Rule 103 of CGST/TGST Rules, 2017and sought Advance Ruling on the following issues:
(i) The rate of tax applicable as on 15.11.2017 on the Lyophilizers- Machinery for the plant which is being cleared under chapter heading 8419.
2. The applicant submitted the application in Form GST ARA-01

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r transport and also to increase the product efficacy with long life. Lyophilization works by cooling the product below eutectic temperature and then reducing the surrounding pressure to allow the frozen water in the material to sublime directly from the solid phase to the gas phase.
(b) Process description:
The Lyophilizer consists of product chamber with shelves and condenser chamber with cooling coils. The product to be converted is placed on the shelves and cooled below its eutectic temperature. Once the product if below its eutectic temperature, the chambers are evacuated to high vacuum, during this process the water in the product sublimes and condenses on the condenser chamber coils. This process continues for some hours and the product gets dried and all the water removed from the product under heat exchange method. Then the chambers are subjected to steam sterilization by using high pressure steam to sanitize the complete system.
(c ) Use in the Industry and classificati

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nly but not at the rate of 14%.
3.5 The following is the text of amendment carried over to Entry No.320 in schedule III to the Notification No.1/2017-Central Tax(Rate), dated. 28.06.2017.
(lxxx) in S. No. 320, for the entry in columns (2) and (3), the following entries shall be substituted, namely:-
“8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non-electric [other than Solar water heater and system]”;
4. The applicant therefore seeks to have an advance ruling on the rate of tax applicable as on 15.11.2017 on Lyophilizers-machinery for the plant

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re mentioned in the above enumeration. Heating, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling. The lyophilizers manufactured by the applicant are not at all falling under the list of goods excluded from the purview of the amended version of Entry No.320 in schedule III.
6. Hence, the applicant is in strong belief that Lyophilizers i.e. Machinery for Plant manufactured by the applicant fall under Entry No.320 of schedule III by following the amendment carried over to it by Notification No.41/2017- Central Tax(rate) dated 14.11.2017.
7. The issues raised in the application has been examined, before deciding the rate of tax applicable for the goods ” Lyophilizers”, we would like to examine the correct classification of the product.
8. The process of Lyophilization, is defined as a freeze-drying process that removes water from a product after it is frozen and placed under a vacuum. It is a low temperature dehydration

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n is found not only in pharmaceutical industry, but also in various other industries.
9. The goods such as ” Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes” are covered under Tariff heading 8419 of Customs Tariff. On examination of the process of Lyophilization, it is found that the goods ” Lyophilizers” are classifiable under Tariff heading 84198990 as per the Section notes to Section XVI and Chapter notes to Chapter 84 of the Customs tariff. As the rules for interpretation of Customs Tariff Act, 1975 was made applicable to GST Tariff, the goods ” Lyophilizers” are classifiable under heading 8419 o

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g, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non-electric [other than Solar water heater and system]” falling under heading 8419 of the GST Tariff have been brought under Schedule-III of the Notification, notifying the rate of central tax as 9% as per G.O.Ms No. 250, Revenue (CT-II) Department, Dt. 21-11-2017. As the goods Lyophilizers are classifiable under the heading 8419 of the GST Tariff, the rate of central tax applicable is 9% only.
12. The issue raised in the application has been examined with reference to the provisions of the CGST/TGST Act, 2017 and the Rules made there under and the notifications issued till date; and the Advance Ruling is given as under:
Notification No. 41/2017 – Central Tax (Rate), Date. 14-11-2017
(G.O.Ms No. 250, Revenue (CT-II) Department, Dt. 21-11-2017)
Sl. No.
Chapter / Heading / Sub-heading / Tariff item
Description of Goods
Rate

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In Re : M/s. Madhucon Sugar and Power Industries Ltd.
GST
2018 (7) TMI 283 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2018 (14) G. S. T. L. 491 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – AAR
Dated:- 2-7-2018
Advance Ruling No. TSAAR Order No. 6/2018, A. R. Com/11/2018
GST
Sri V. Srinivas, IRS, Joint Commissioner (Central Tax) And Sri J. Laxminarayana, Additional Commissioner (State Tax)
RULING
M/s. Madhucon Sugar and Power Industries Ltd, Ammagudem post, Rajeswarapuram village, Nelakondapally Mandal, Khammam District has filed an application in Form GST ARA-01 under Section 97(1) of TGST Act,2017 read with Rule 103 of CGST/TGST Rules, 2017stating that they are manufacturers of

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pose to State distilleries and beverages used for human consumption, what is their obligation and eligibility of Input credit taken on materials/ consumables ?
2. The applicant submitted the application in Form GST ARA-01 and have submitted a copy of Challan evidencing payment of application fee of Rs. 5,000/-.
3. Statement of relevant facts submitted by the applicant:
(i) All spirits (other than denatured ethyl alcohol of any strength) for example ENA for potable application is and has been out of the ambit of the Central Excise duty as can be seen from S.No.40 of the Notification No.12/2012 dated 17.03.2012 which exempts Central Excise duty.
(ii) Prior to introduction of GST all ENA/RS (un-denatured) is exempted under Central Excise

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ought in the application has been examined in detail and found that the issue of “Taxation of Rectified Spirit/ Extra Neutral Alcohol (ENA) under GST” is one of the agenda points placed before GST council for deliberation in the 20th meeting of the GST council held on 05.08.2017. The decision on the “applicability of GST on ENA” is pending before GST council and even in the 27th GST council meeting held on 04.05.2018 it was decided to defer the agenda point on the “applicability of GST on ENA” to the next meeting.
6. Since the issue raised by the applicant is pending before GST Council for a decision, Advance Ruling on the issues raised in the application cannot be given at this juncture.
7. Hence, the application filed by M/s Madhucon Su

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CGST, C&CE, Jaipur Versus M/s National Engineering Industries Ltd.
Central Excise
2018 (7) TMI 168 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 2-7-2018
Excise Appeal No. 51217 of 2018 (SM) – Final Order No. 52381/2018
Central Excise
Hon'ble Shri Ajay Sharma, Member (Judicial)
Shri K. Poddar, Authorized Representative (DR) – for the appellant
Ms. Sukriti Das, Advocate – for the respondent
ORDER
Per. Ajay Sharma
The instant appeal has been filed from the order-in-appeal No. 70 (SM) CE/JPR/2018 dated 21/02/2018.
2. The respondent/assessee are engaged in the manufacture of Ball Bearing falling under Chapter 84 of the Schedule to the Central Excise Tariff Act, 1985. A show cause notice dated 17/12/2005 was issued to the respondent alleging thereunder that they have wrongly availed Cenvat credit amounting to Rs. 15,74,528/- on the ineligible input service rendered by the sales agents/commission agents during the period December 2014 to October 2015. They

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nurture market for the respondent/assessee. Further, once the order is placed, to ensure that the same is taken to its logical course these activities are nothing but are sale promotion activities and, therefore, the element of sales promotion was very much involved in the services provided by these representatives. She further recorded that the insertion of the explanation vide Notification No. 02/2016 – CE (NT) dated 03/02/2016 in the definition of “input services” clarifying that “sales promotion” include services by way of sale of dutiable goods on commission basis and, therefore, the respondent/assessee is eligible to avail Cenvat credit of service tax paid on commission to sales agents/commission agents. Aggrieved the Revenue filed appeal before the Commissioner (Appeals) and the learned Commissioner (Appeals) vide impugned order dated 21/02/2018 rejected the appeal filed by the Revenue and held that in the light of clarification dated 29/04/2011 in Notification dated 03/02/2016

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e instant appeal are extracted as under :-
“Rule 2 (l) “input service” means any service, –
(i) used by a provider of [output service] for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal”;
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“Cenvat Credit Rules, 2004 – Second Amendment

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sed for payment of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the Finance Act, 2015 (20 of 2015):”.
[Notification No. 2/2016-C.E. (N.T.), dated 3-2-2016]”
6. According to learned DR, the explanation inserted in the Rule 2 (i) vide notification dated 03/02/2016 shall be effective only from the date of publication in the official gazette i.e. shall have only prospective application and that the learned Commissioner (Appeals) has erred in applying the said explanation retrospectively. He further submitted that there is no nexus between the sales/commission agent activities and the manufacturing activities and that manufacturing can be undertaking without availing the services of sales/commission agent.
7. The learned Advocate appearing for the respondent/ assessee on the other hand supported the impugned order passed by the learned Commissioner (Appeals).
8. Whether the explanation added in Rule 2 (l) of Cenvat Credit Rules, 2004 vide notification dated 03

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clared that sales promotion includes services by way of sale of dutiable goods on commission basis. In other way, Explanation to Rule 2(l) of Rules says in clear terms that there is no bar on availment of the Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis. Further, by inserting the Explanation in the Rule 2(l), it has confirmed the Board Circular and resolved the different views of the High Courts. Taking into circumstances under which the Explanation was inserted in Rule 2(l) of Rules, 2004 and consequence of the Explanation to extend the benefit to the assessee as per Board Circular, we hold that the Explanation inserted in Rule 2(l) of Rules, 2004 by Notification No. 2/2016-CX (N.T.) (supra) should be declaratory in nature and effective retrospectively”.
9. The said decision of Essar Steel India Ltd. (supra) has been further followed by this Tribunal in a batch of matter titled as M/s Mangalam Cement Ltd. vs. CCE, Udaipur vide final or

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at credit is admissible on the services of the sale of the dutiable goods on commission basis. The said circular was endorsed by the Central Government vide Notification No. 2/2016-CE (NT) dated 03/02/2016. In the case of Cadila Healthcare Ltd. (supra), the Hon'ble Gujarat High Court had not referred to the Circular dated 29/04/2011 and also there were divergent views by the Hon'ble Punjab & Haryana High Court in the case of CCE, Ludhiana vs. Ambika Overseas – 2012 (25) S.T.R. 348 (P&H). Considering the conflict in judgments of different High Courts and also the notification dated 03/02/2016, this Tribunal in the case of Essar Steel India Ltd. (supra) has held that the said notification should be considered as declaratory in nature and effective retrospectively. The relevant paragraph in the said decision is extracted herein below :-
“20. But, the Hon'ble Gujarat High Court in the case of Cadila Healthcare Ltd. (supra) was unable to concur with the contrary view taken by the Hon'ble

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sessee as per Board Circular, we hold that the Explanation inserted in Rule 2(l) of Rules, 2004 by Notification No. 2/2016-CX (N.T.) (supra) should be declaratory in nature and effective retrospectively”.
5. In view of the above settled position and law, we do not find any merits in the impugned orders. Accordingly, after setting aside the same, we allow the appeals in favour of the appellants”.
10. Thereafter again this issue came up before this Tribunal in a batch of matters in which this Tribunal vide final order Nos. 51412-51426 of 2018 dated 16/04/2018 while following its decision in the matter of National Engineering Industries Ltd. (supra) dismissed the appeal filed by the Revenue.
11. Explanation to Rule 2 (l) of Rules 2004 says it in clear terms that there is no bar on availment of Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis. During the period from 2008 onwards this issue has been considered by various appellate authorities

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M/s Pee Cee Cosma Sope Ltd. Versus CE, C & CGST – CCE & ST, Jodhpur
Service Tax
2018 (7) TMI 99 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 2-7-2018
Appeal No. ST/51046/2018 – EX(SM) – Final Order No. 52367/2018
Service Tax
Hon'ble Ms. Rachna Gupta, Member ( Judicial )
Shri Ravikant Mishra, Advocate for the appellant
Shri H.C. Saini, D. R. for the respondent
ORDER
Per Rachna Gupta
Present is an appeal filed being aggrieved of Order of Commissioner (Appeals) dated 26.02.2018 whereby the Cenvat Credit of Rs. 70,714/- has been held to be irregularly availed by the Appellant and has accordingly been disallowed with the order of recovery thereof along with the interest. In addition, a penalty has been imposed in view of Section 78 of the Central Excise Act, 1944. The factual matrix relevant for the purpose is as follows:
1. The Appellant is engaged in the manufacture of excisable goods falling under Chapter 34 of Central Excise Tariff Act, 1985. It

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definition of place of removal as given in the Act and since the place where excisable goods sold can be the place where the property or goods can process from buyer to seller and the sale culminates only after the goods reached the destination then it will be deemed to be place of removal. Accordingly, the freight rate for transporting the goods from the Appellant's premises to the customer's premises for sale, have had rightly been considered as input services by the Appellant and a right credit thereof has been availed. The findings of the order under challenge are therefore liable to be set aside.
3. It is further submitted that even if the Tribunal is convinced with the findings of the impugned order, still the order under challenge deserves to be set aside for the basic reason that the Show Cause Notice based upon which the order has been announced is hopelessly barred by time. The refund for the period with effect from 2011 to 2015 has been challenged and the Show Cause Notice

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he part of the Appellant. Hence, the Department has rightly invoked Section 78 of the Act. The order under challenged has rightly been announced. The appeal is, accordingly, prayed to be rejected. After hearing both the parties and perusing the entire record of this appeal, we are of the considered opinion as follows:
(i) The core issue involved in the present case is with regard to the admissibility, or otherwise, of Cenvat Credit on goods transport agency service availed for transport of goods from the place of removal to the buyer's premises, treating the said service as the input service. For this purpose, the definition of input service as defined in Rule 2(l) of Cenvat Credit Rules, 2004 (CCR) is important to be looked into. It reads as follows:
“5. 'Input service' is defined in Rule 2(l) of the Rules, 2004 which reads as under:
“2(l) “input service” means any service:-
(i) Used by a provider of taxable service for providing an output services; or
(ii) Used by the manufa

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f clearance of final products 'from the place of removal' to the warehouse of customer's place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word 'from' is replaced by the word 'upto'. Thus, it is only 'upto the place of removal' that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal and doors to the Cenvat credit of input tax paid gets closed at that place. This credit cannot travel therefrom. It becomes clear from the bare reading of this amendment Rule, which applies to the period in question that the Goods Transport Agency service used for the purpose of o

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ayment of duty would be contrary to the scheme of Cenvat Credit Rules. The main clause in the definition states that the service in regard to which credit of tax is sought, should be used in or in relation to clearance of the final products from the place of removal. The definition of input services should be read as a whole and should not be fragmented in order to avail ineligible credit. Once the clearances have taken place, the question of granting input services stage credit does not arise. Transportation is an entirely different activity from manufacture and this position remains settled by the judgment of Honourable Supreme Court in the cases of Bombay Tyre International – 1983 (14) E.L.T. 1896 (S.C.), Indian Oxygen Ltd. – 1988 (36) E.L.T. 723 (S.C.) and Baroda Electric Meters – 1997 (94) E.L.T. 13 (S.C.). The post removal transport of manufactured goods is not an input for the manufacturer. Similarly, in the case of M/s Ultratech Cements Ltd. v. CCE, Bhatnagar – 2007 (6) S.T.R.

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CGST, C & CE, Alwar Versus M/s Krishi Icon
Service Tax
2018 (7) TMI 97 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 2-7-2018
Service Tax Appeal No. 51179 of 2018 (SM) – Final Order No. 52380/2018
Service Tax
Hon'ble Shri Ajay Sharma, Member ( Judicial )
Shri K. Poddar, Authorized Representative ( DR ) – for the appellant
Shri Mohit Gohlyan, C.A. – for the respondent
ORDER
Per. Ajay Sharma
The instant appeal has been filed from the order-in-appeal dated 16/01/2018.
2. The respondent/assessee is engaged in providing the “construction of residential complex services, real estate agent services and business support services”. During the course of audit of records of the respondent/assessee it was observed that the assessee had availed Cenvat credit of service tax paid on “commission/brokerage on sale of flats” amounting to Rs. 40,56,453/- during the period from July 2013 to September 2015. Accordingly, a show cause notice was issued to the respondent/as

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l) of Cenvat Credit Rules, 2004.
4. The amount of recovery of Rs. 40,56,453/- alongwith interest and penalty was confirmed by the Adjudicating Authority vide order-in-original dated 29/06/2016. Aggrieved the respondent/assessee filed appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide impugned order dated 16/01/2018 allowed the appeal filed by the respondent/ assessee and held as under :-
“10. In view of above discussion and in the light of the clarification dated 24/09/2011 and notification dated 03/02/2016, I can safely conclude that the activity of commission agent for selling the products of the appellants is squarely covered under the scope of definition of input service provided under Rule 2 (l) of the Cenvat Credit Rules, 2004, as such the appellants were entitled to avail the subject credit and the same has been correctly availed. I therefore, find it proper to set aside the impugned orders disallowing the credit and ordering for recovery of the same al

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nal products and clearance of final products upto the place of removal,
and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal”;
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             “Cenvat Credit Rules, 2004 – Second Amendment of 2016
In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend th

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serted in the Rule 2 (i) vide notification dated 03/02/2016 shall be effective only from the date of publication in the official gazette i.e. shall have only prospective application and that the learned Commissioner (Appeals) has erred in applying the said explanation retrospectively. He further submitted that there is no nexus between the sales/commission agent activities and the manufacturing activities and that manufacturing can be undertaking without availing the services of sales/commission agent.
8. The learned Consultant appearing for the respondent/ assessee on the other hand supported the impugned order passed by the learned Commissioner (Appeals).
9. Whether the explanation added in Rule 2 (l) of Cenvat Credit Rules, 2004 vide notification dated 03/02/2016 has retrospective effect or not, has come before this Tribunal in the matter of Essar Steel India Ltd. vs. CCE & ST, Surat – I reported in 2016 (335) E.L.T. 660 (Tri. – Ahmd.) in which this Tribunal has held that the expl

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s promotion service by way of sale of dutiable goods on commission basis. Further, by inserting the Explanation in the Rule 2(l), it has confirmed the Board Circular and resolved the different views of the High Courts. Taking into circumstances under which the Explanation was inserted in Rule 2(l) of Rules, 2004 and consequence of the Explanation to extend the benefit to the assessee as per Board Circular, we hold that the Explanation inserted in Rule 2(l) of Rules, 2004 by Notification No. 2/2016-CX (N.T.) (supra) should be declaratory in nature and effective retrospectively”.
10. The said decision of Essar Steel India Ltd. (supra) has been further followed by this Tribunal in a batch of matter titled as M/s Mangalam Cement Ltd. vs. CCE, Udaipur vide final order No. 56683-56685/2017 dated 28/08/2017, in which this Tribunal following its decision in Essar Steel Ltd. (supra) allowed the appeals filed by the appellants and the said decision in M/s Mangalam Cement Ltd. (supra) has been f

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Healthcare Ltd. (supra), the Hon'ble Gujarat High Court had not referred to the Circular dated 29/04/2011 and also there were divergent views by the Hon'ble Punjab & Haryana High Court in the case of CCE, Ludhiana vs. Ambika Overseas – 2012 (25) S.T.R. 348 (P&H). Considering the conflict in judgments of different High Courts and also the notification dated 03/02/2016, this Tribunal in the case of Essar Steel India Ltd. (supra) has held that the said notification should be considered as declaratory in nature and effective retrospectively. The relevant paragraph in the said decision is extracted herein below :-
“20. But, the Hon'ble Gujarat High Court in the case of Cadila Healthcare Ltd. (supra) was unable to concur with the contrary view taken by the Hon'ble Punjab & Haryana High Court in the case of Commissioner of Central Excise, Ludhiana v. Ambika Overseas (supra). The Hon'ble Gujarat High Court held that this issue is concerned, the question is answered in favour of the Revenue a

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e settled position and law, we do not find any merits in the impugned orders. Accordingly, after setting aside the same, we allow the appeals in favour of the appellants”.
11. Thereafter again this issue came up before this Tribunal in a batch of matters in which this Tribunal vide final order Nos. 51412-51426 of 2018 dated 16/04/2018 while following its decision in the matter of National Engineering Industries Ltd. (supra) dismissed the appeal filed by the Revenue.
12. Explanation to Rule 2 (l) of Rules 2004 says it in clear terms that there is no bar on availment of Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis. During the period from 2008 onwards this issue has been considered by various appellate authorities and the Board has also issued clarification vide Circular dated 29/04/2011 specifically under point No. 5 which contains the wording that “… Moreover activity of sales promotion is specifically allowed and on many occasion the

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In Re: Jaimin Engineering Private Limited
GST
2018 (9) TMI 694 – AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN – 2018 (17) G. S. T. L. 33 (A. A. R. – GST), [2019] 61 G S.T.R. 54 (AAR)
AUTHORITY FOR ADVANCE RULINGS, RAJASTHAN – AAR
Dated:- 1-7-2018
RAJ/AAR/2018-19/07
GST
NITIN WAPA AND SUDHIR SHARMA, MEMBER
Present for the Applicant.
Ms. Shafaly Girdharwal, CA (Authorised Representative).
1. SUBMISSION OF THE APPLICANT:
M/s. Jaimin Engineering Private Limited is engaged in construction of Cold storage. GST provisions for registration are covered in Chapter 6 of CGST Act, Section 22 of CGST Act provide for the basic requirement for registration as reproduced below:
Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
Provided that where such person

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sions of the supply; and
(d)  in absence of such places, the location of the usual place of residence of the supplier;
2. Issues to be decided:
M/s. Jaimin Engineering Private Limited is a company incorporated under the Companies Act 1956.lt is engaged in construction of cold storages at various parts of Country. They are expecting to do some construction work in the state of Rajasthan whereas they are located in the state of Gujarat and registered there in GST. As per GST provisions every supplier is required to take registration in each state where he have a place of business. Here they have place of business in Gujarat and are duly registered there. They will be charging IGST on their activity in Rajasthan making it a place of supply. The state share of that IGST will go to the state of Rajasthan as it is the place of supply. The taxpayer believes that he is not required to take registration in the state of Rajasthan.
3. Personal Hearing (PH)
In the matter personal hearing

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a clear demarcation of a works contract as a supply of service under GST Act.
As per Section 2(15) of the Integrated Goods And Service Tax Act, 2017, the term “location of the supplier of services” means,-
(a)  where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(b)  where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(c)  where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and
(d)  in absence of such places, the location of the usual place of residence of the supplier
The Location of the Works Contractor shall remain to be the state where his principal place of business is registered (unless he ha

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In Re: RFE Solar Pvt Ltd.
GST
2018 (9) TMI 693 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2018 (16) G. S. T. L. 623 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, RAJASTHAN – AAR
Dated:- 1-7-2018
Raj/AAR/2018-19/08
GST
NITIN WAPA AND SUDHIR SHARMA MEMBER
Present for the applicant: CA Yash Dhadda, Counsel (Authorised Representative). CA Rajeev Tiwari
Note:
Under Section 100 of the RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of RGST Act 2017, within a period of 30 days from the date of service of this order.
The Issues raised by the applicant is fit to pronounce advance ruling as they fall under ambit Of the Section 97(2)(a) and (e), they are as given under:
(a) Classification of any goods or services or both;
(e) Determination of the liability to pay tax on any goods or services both;
Further, the applicant being a registered person, GSTIN is 08AAICR3819D1ZE, as per th

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lants”.
The contract between the assessee and its clients flows in a way wherein firstly they (assessee) shall agree and enter into 'Terms of Engagement' with each other defining the scope of work to be executed by assessee for client, the commercials for and timelines for EPC work as a whole to be undertaken. Thereafter in some cases, for the sake of convenience and clarity for steps to be undertaken specific terms are agreed and executed for Procurement and Supply of Goods and components forming part of solar power plant and for Installation & Commissioning to be undertaken for the Solar Power Plant as detailed in contract entered
In a nutshell, assessee undertakes following activities for effecting Supply of Solar Power Plants –
1) Consulting in Procurement of Land on which Solar Power Generation System shall be installed.
2) Procurement and Supply Of components Of Solar Power Generation System (these materials are mostly imported by assessee on the basis of order recei

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ted from one location to another in case it is required to do so. No substantial damage shall be caused to any of the components of the Solar Power Plant.
Thus the plant is effectively movable and can be reinstalled on any other piece of land.
The assessee wants to understand that whether supply under consideration is Supply of Goods or Supply of Service.
That Section 9 of the CGST Act 2017 which is charging section of Goods & Services Tax states:
9(1) Subject to provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations Of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
The term “goods” has been defined under secti

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2.
The term works contract has been defined under Section 2(119) as
(119) “works contract” means a contract for building, construction, fabrication, completion, erection, installation fitting out, improvement,  modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in execution of such contract.
Since given work executed by the assessee includes supply of goods and also performance of services hence it can be treated as amalgamation of 2 supplies. To decide whether the given amalgamation is composite or mixed supply, there definitions have to be understood.
As per Section 2(30) composite supply is defined as
(30) “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunct

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of goods or service, the concept of works contract can be explored first. Works contract in itself is a composite supply in which construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning etc. are involved along with transfer of property in goods.
However under GST, there is a monumental shift in concept of Works Contract which was prevalent under erstwhile VAT and Service Tax regime. In GST, as per definition of works contract service if construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning is for immovable property only, then it will classify as works contract only. Hence it means that aforesaid activities if they are undertaken for a movable property then it will not be works contract service.
That the contract between the client and the assessee covers not only supply

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nd things attached to the earth, or permanently fastened to anything attached to the earth.
As per the definition the term permanently fastened or attached to earth can be treated as immovable property. Any attachment with earth which is temporary in nature or can be shifted from part of earth to another without causing substantial damage to it cannot be treated as immovable property.
Further, on the given issue, CBEC has also clarified in its circular number 58/1/2002-CX dated 15/1/2002 where in para (e) it was clarified that
e) If items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items would not be considered as moveable and will, therefore, not be excisable goods.
In case of Sirpur Paper Mills Ltd. v. Collector 1998 (97) E.L.T. 3 (S.C.) = 1997 (12) TMI 109 – SUPREME COURT OF INDIA it  was held by Hon'ble Supreme Court that:
Apart from this fi

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er Bombay & Ors. v. Indian Oil Corporation Ltd. [1991 Suppl. (2) SCC 181, = 1990 (11) TMI 407 – SUPREME COURT one of the questions SC Court considered was whether a petrol tank, resting on earth on its own weight without being fixed with nuts and bolts, had been erected permanently without being shifted from place to place. It was pointed out that the test was one of permanency: if the chattel was movable to another place of use in the same position or liable to be dismantled and re-erected at the later place. if the answer to the former is in the positive it must be a movable property but if the answer to the latter part is in the positive then it would be treated a permanently attached to the earth.
It is pertinent to note that Solar Power Plant has two blocks namely Solar Block and Power Block which has various components. The essential ingredients of Solar Power Plant and it's blocks are PV Modules, Panels, Cables, Module Mounting Structures; Fuse Connectors, Inventors and Tra

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ce since the property coming into existence Shall not result into immovable property and will remain a movable property only.
Next point for consideration is if it is supply of goods then what shall be principal supplies. It is important to note that various items from panels, batteries, cables, transformer etc are supplied for the solar power plant. Whether it can be treated as supply Of individual items or supply of solar power plant as a whole remains a question.
In this regard the decision in case of Shree Venkateswara Engg. Corporation Versus C.C.E., Coimbatore reported in 2016 (335) E.LT. 62 (Tri. -Chennai) = 2016 (2) TMI 65 – CESTAT CHENNAI can be referred.
It was held by Hon'ble CESTAT that Energy device/system (Non-conventional) – Clearance of in knocked down condition as parts – Exemption Notification No. 6/2002-C.E. – Denial of- Serial No. 16 of List 9 to said notification covering complete device and not parts during relevant period – HELD : Impugned device consistin

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Power Plant and not the individual components. Hence in view of above precedence and facts of the case, the given supply should be treated as supply of Solar Power Plant Only.
Further under notification No 01/2017-CT (Rate) dated 28.06.2017, at S.No. 234, under HSN Classification 84, 85 and 94, for description.
Following renewable energy devices parts for their manufacture
(c) Solar Power Generating System
The rate Of CGST has been mentioned as 2.5%. In given case also, it has been specified that intention of parties was to supply solar power plant only. Hence according to assessee, the correct classification of given supply should be Chapter 84: Solar Power Generating System at the rate of 5%.
2 Issues to be decided:
1) Question 1: Whether contract for Erection, Procurement and Commissioning of Solar Power Plant shall be classifiable as Supply of Goods or Supply of Services under the provisions of the Central Goods and Services Tax Act 2017 and Rajasthan State Goods and Servi

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e in the application for Advance Ruling and further requested that the case may be decided as per the submission made earlier in Advance Ruling Application.
4. Findings and analysis:
As per copy of contract submitted by the applicant the contractor i.e. M/S RFE Solar Private Limited has to execute a “Composite EPC Contract”. After going through the Written submissions, copy of contract and Other additional statements following findings and analysis is made:
a) It is a composite EPC contract Which has been entered between Kushtagi Solar Power Private Limited (owner) and RFE Solar Private Limited (contractor) on 01.03.2018 for setting up of Solar Power Plant where the contractor has to, inter alia. design, engineer, procure, transport, deliver, develop, erect, install, test and commission the project.
b) The contract is to set up a Solar Power Plant and related interconnection facilities (including 110 KV transmission line, 110 Kv pooling substation, main control room and bay extens

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lause 4.26 of the Contract, all risk and liabilities accruing in relation of works (temporary or permanent), and of all equipments, machinery, materials, shall be with contractor until occurrence of the Final Acceptance.
f) Schedule 2 – Scope of works clearly spells out the terms and condition of “Composite EPC Contract” where contractor has to undertake works of installation, testing and commissioning of Solar Power Plant as per specific demands of owner. So it is not something sold out of shelf.
g) There is a single lump sum price for the entire contract.
h) The applicant has laid claim under notification No. 01/2017-CT (Rate) dated 28.06.2017, at S.No. 234, under HSN Classification 84, 85 and 94, for description :
* Following renewable energy devices & parts for their manufacture
(c) Solar Power Generating System,
The rate of CGST has been mentioned as 2.5%. According to assessee, the correct classification of given supply should be Chapter 84: Solar Power Generating System

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act service.
j) Applicant has relied upon following judgments in furtherance of their arguments of solar power plant being movable property and not immovable:
i) Sirpur Paper Mills Ltd. v. Collector – 1998 (97) E.L.T. 3 (S.C.) = 1997 (12) TMI 109 – SUPREME COURT OF INDIA
ii) Municipal Corporation of Greater Bombay & Ors. v. Indian Oil Corporation Ltd. [1991 Suppl. (2) SCC 181, = 1990 (11) TMI 407 – SUPREME COURT
iii) Shree Venkateswara Engg. Corporation Versus C.C.E., Coimbatore reported in 2016 (335) E.LT. 62 (Tri. -Chennai) = 2016 (2) TMI 65 – CESTAT CHENNAI
iv) CBEC circular number 58/1/2002-cx dated 15/1/2002
v) Board of Revenue, Chepauk, Madras v. K. Venkataswami Naidu (AIR 1955 Mad 620, 1955 CriLJ 1369) = 1955 (3) TMI 46 – MADRAS HIGH COURT
vi) Commissioner of Central Excise v. Solid and Correct Engg Works & ors. (2010 (175) ECR 8 (SC)) = 2010-TIOL-25-SC-CX  = 2010 (4) TMI 15 – SUPREME COURT
Relying on aforesaid judgements and citations the applicant contends that a

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term 'immovable property' has not been defined under the GST Act. However, there are a plethora of judgments of the Hon. Supreme Court and the Hon. High Coutts which have helped understand the term 'immovable property'.
1. In decision of Allahabad High Court in Official Liquidator v. Sri Krishna Deo and Ors. [AIR 1959 All. 247], = 1958 (5) TMI 35 – HIGH COURT OF ALLAHABAD wherein, the Court held that a machinery fixed to their bases with bolts and nuts although easily removable are not movable property when they have been set up with definite object of running an oil mill and not with intention of being removed after a temporary use.
2. In decision of M/s. T.T.G. Industries Ltd., vs Collector of Central Excise, 2004 (167) ELT 501 (SC) on 7 May, 2004. = 2004 (5) TMI 77 – SUPREME COURT OF INDIA The facts of the case are as follows:
The facts of the case are not in dispute. The appellant-company pursuant to the acceptance of its tender, entered into an agreement with M

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s to drill hole in the blast furnace to enable the molten steel to flow out of the blast furnace for collection in ladles for further processing. After the molten material is taken out of the blast furnace, the hole in the wall of the furnace has to be closed by spraying special clay. This function is performed by the mudgun which is brought to its position and locked against the wall for exerting a force of 240-300 tons to fill up the hole in the furnace. The blast furnace in which the inputs are loaded is a massive vessel of 1719 m cubic metre capacity and the size of its outer diameter is 10.6 metres, and the height 31.25 metres. Hot air at 1200 degrees centigrade is fed into the blast furnace at various levels to melt the raw materials. With a view to protect the shell against heat, the blast furnace is lined with refractory brick of one metre thickness. Thus, the drilling machine has to drill a hole through one metre thickness of the refractory brick lining. The drilling machine a

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y helps in the movement of various components to their determined position. The various components of the mudgun and drilling machine are mounted piece by piece on a metal frame, which is welded to the base plate. The components are stored in a store-house away from the blast furnace and are brought to site and physically lifted by a crane and landed on the cast house floor 25 feet high near the concrete platform where drilling machine and mudgun has to be erected. The weight of the mudgun is approximately 19 tons and the weight of the drilling machine approximately 11 tons. The volume of the mudgun is 1.5 x 4.5 x 1 metre and that of the drilling machine 1 x 6.5 x 1 metre. Having regard to the volume and weight of these machines there is nothing like assembling them at ground level and then lifting them to a height of 25 feet for taking to the cast house floor and then to the platform over which it is mounted and erected. These machines cannot be lifted in an assembled condition.
The

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ction of immovable property. She noticed the judgment of this Court in Narne Tulaman Manufacturers Pvt. Ltd. (supra) and also noticed the judgment of the Tribunal in Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd. v. CCE – 1993 (65) E.L.T. 121; = 1992 (10) TMI 188 – CEGAT, NEW DELHI which held that the issue of immovable property was never raised before the Supreme Court in Narne Tulaman Manufacturers Pvt. Ltd. She found support for her conclusion in the decision of this Court in Municipal Corporation of Greater Bombay & Ors. v. The Indian Oil Corporation Ltd. (1991) Supp. (2) SCC 18; = 1990 (11) TMI 407 – SUPREME COURT and held that the twin tests laid down by this Court to determine whether assembly/erection would result in immovable property or not were fully satisfied in the facts of this case. She concluded :-
“The test laid down by the Supreme Court is that if the chattel is movable to another place as such for use, it is movable but if it has to be dismantled and reassembl

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erection of immovable property and not “goods”.
The appellant has placed considerable reliance on the principles enunciated and the test laid down by this Court in Municipal Corporation of Greater Bombay (supra) to determine what is immovable property. In that case the facts were that the respondent had taken on lease land over which it had put up, apart from other structures and buildings, six oil tanks for storage of petrol and petroleum products. Each tank rested on a foundation of sand having a height of 2 feet 6 inches with four inches thick asphalt layers to retain the sand. The steel plates were spread on the asphalt layer and the tank was put on the steel plates which acted as bottom of the tanks which rested freely on the asphalt layer. There were no bolts and nuts for holding the tanks on to the foundation. The tanks remained in position by its own weight, each tank being about 30 feet in height 50 feet in diameter weighing about 40 tons. The tanks were connected with pump

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rmanency test laid down in the aforesaid decision, counsel for the appellant contended that having regard to the facts of this case which are not in dispute, it must be held that what emerged as a result of the processes undertaken by the appellant was an immovable property. It cannot be moved from the place where it is erected as it is, and if it becomes necessary to move it, it has first to be dismantled and then re-erected at another place. This factual position was also accepted by the Adjudicating Authority.
The technical member, however, held that the aforesaid decision was of no help to the appellant inasmuch as a leading international manufacturing firm had offered such machines for export to different parts of the world. He further observed that though on account of their size and weight, it may be necessary to shift or transport them in parts for assembly and erection at the site in the steel plant, they must nevertheless be deemed as individual machines having specialized

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em to form a part of the tube mill and purchasing certain components from the market and assembling and installing them on the site to form part of the tube mill which was also covered in the process of welding facility. After noticing several decisions of this Court, the Court observed that the twin tests of exgibility of an article to duty under the Excise Act are that it must be a goods mentioned either in the Schedule or under Item 68 and must be marketable. The word “goods” applied to those which can be brought to market for being bought and sold and therefore, it implied that it applied to such goods as are movable. It noticed the decisions of this Court laying down the marketability tests. Thereafter this Court observed :-
“The basic test therefore, of levying duty under the Act is two fold. One, that any article, must be a goods and second, that it should be marketable or capable of being brought to market. Goods which are attached to the earth and thus become immoveable do n

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supports, plates etc. The aforesaid parts were cleared from the premises of the appellants and the mono vertical crystalliser was assembled and erected at site. The process involved welding and gas cutting. The mono vertical crystalliser is a tall structure, rather like a tower with a platform at its summit. This Court noticed that marketability was a decisive test for dutiability. It meant that the goods were saleable or suitable for sale, that is to say, they should be capable of being sold to consumers in the market, as it is, without anything more. The Court then referred to the decision in Quality Steel Tubes (supra) and distinguished the judgment in Narne Tulaman (supra) holding that the contention that the weigh bridges were not goods within the meaning of the Act was neither raised nor decided in that case. After considering the material placed on the record it was held that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation a

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ineering Works Pvt. Ltd. (supra) as also the earlier judgment of this Court in Sirpur Paper Mills Ltd. v. Collector of Central Excise, Hyderabad – 1998 (97) E.L.T. 3 (S.C.). = 1997 (12) TMI 109 – SUPREME COURT OF INDIA This Court observed :-
“There can be no doubt that if an article is an immovable property, it cannot be termed as “excisable goods” for purposes of the Act. From a combined reading of the definition of 'immovable property' in Section 3 of the Transfer of Property Act, Section 3(25) of the General Clauses Act, it is evident that in an immovable property there is neither mobility nor marketability as understood in the Excise Law. Whether an article is permanently fastened to anything attached to the earth require determination of both the intentions as well as the factum of fastening to anything attached to the earth. And this has to be ascertained from the facts and circumstances of each case.”
It was also held that the decision of this Court in Sirpur Paper M

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noticed the processes involved and the manner in which the equipments were assembled and erected. We have also noticed the volume of the machines concerned and their weight. Taking all these facts into consideration and having regard to the nature of structure erected for basing these machines, we are satisfied that the judicial member of the CEGAT was right in reaching the conclusion that what ultimately emerged as a result of processes undertaken and erections done cannot be described as “goods” within the meaning of the Excise Act and exigible to excise duty. We find considerable similarity of facts of the case in hand and the facts in Mittal Engineering and Quality Steel Tubes (supra) and the principles underlying those decisions must apply to the facts of the case in hand. It cannot be disputed that such drilling machines and mudguns are not equipments which are usually shifted from one place to another, nor it is practicable to shift them frequently. Counsel for the appellant su

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st to prevent wobbling of the machine would not place the machine in the category of 'immovable property' as something attached to the earth.
5. In light of above judgements and scope of work it is observed:
1) That the Solar Power Plant is a big project and has a permanent location as it is meant for onward sale of power to the consumer. Such plant would therefore have an inherent element of permanency.
2) The output of the project i.e. power, would be available to an identifiable segment of consumer. Thus this output supply would involve an element of permanency for which it would not be possible and prudent to shift base from time to time or locate the plant elsewhere at frequent intervals.
3) The Solar Power Plant cannot be shifted to any other place without dismantling the same. Further it is a tailor made system which cannot be sold as it is to the other person.
4) Solar Power Plant includes civil work such as development of site, structure Structure for 110kv tr

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not intended to be permanent and was to be shifted after completion of road repair and Construction work hence it was regarded as moveable. But in the instant case the solar power plant has an element of permanency.
7) An Overview of all makes us observe that the impugned transaction for EPC Contract for the Solar Power Plant which includes engineering, design, procurement, supply, development, testing and commissioning is a “works contract” in terms of clause (119) of section 2 of the GST Act.
8) Since the impugned transaction for EPC Contract for the Solar Power Plant is a works contract under section 2(119) as supply of services hence question of principal supply does not arise and so GST tax rate of Solar power Generating System under notification No 01/2017-CT (Rate) dated 28.06.2017, at S. No. 234, under HSN Classification 84, 85 and 94 is not applicable.
Based on above facts along with provisions of law, the ruling is as follows:
RULING
1. As per the statement of facts

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Input tax credit on JCB
Query (Issue) Started By: – Prateek Agrawal Dated:- 30-6-2018 Last Reply Date:- 7-7-2018 Goods and Services Tax – GST
Got 14 Replies
GST
An agreement with JCB owner that we will pay monthly rent of ₹ 50000/- to him if any repair and maintenance of JCB will bear by us . If any repair and maintenance done by us and invoices are prepared in our company name can we take INPUT TAX CREDIT of the same in our books of A/c
Reply By YAGAY and SUN:
The Reply:
In our view ITC would be available to you.
Reply By Ganeshan Kalyani:
The Reply:
I am also of the view that input tax credit is eligible.
Reply By Alkesh Jani:
The Reply:
Sir,
I agree with the views expressed by our experts
Thanks
Reply By Himan

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agreement.
Reply By Alkesh Jani:
The Reply:
Sir,
My view is based on the Notification No.11/2017-CT (Rate) dated 28/06/2017 as amended from time to time. The Sl.No.17 which refers to HSN code 9973 i.e. lease or rental service, wherein, it is stated that temporary or permanent or permitting the use …… Therefore, without its repair one cannot use and even temporary use, the repairing charges are normally borne by the user. It can be conclude that the user is temporary owner of the machinery. Hence, ITC is available.
Further, If, by way of agreement, such charges are reimbursed by the actual owner, then I would say, ITC is not available.
Our experts may correct me if mistaken.
Thanks
Reply By Himansu Sekhar:
The Reply:

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is in course or furtherance of the business hence credit is eligible.
Reply By YAGAY and SUN:
The Reply:
Please check the Explanatory Notes to the Scheme of Classification of Services under GST Regime.
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
In my opinion the views of Shri Alkesh is correct.
Reply By AKSHAY NAIK:
The Reply:
Dear Sirs,
Is Input Tax Credit available on Hiring services of Crane for moving of inventory in stores/warehouse?
Thanks,
Reply By KASTURI SETHI:
The Reply:
Yes. It is available. Hiring of crane is classified under the category of "Right to use /supply of tangible goods". It conforms to the definition of "in business or furtherance of business."
Reply By Himansu Sekhar:
The Reply:
T

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GENERATION OF EWAY BILL
Query (Issue) Started By: – SURYAKANT MITHBAVKAR Dated:- 30-6-2018 Last Reply Date:- 10-7-2018 Goods and Services Tax – GST
Got 7 Replies
GST
If value not exceed ₹ 50000/- the generation of Eway Bill is not applicable.
But this applicable for both transaction i.e. Inter State & Intra state supply ?
Reply By SHIVKUMAR SHARMA:
The Reply:
Yes,For both type of Supply.
Reply By YAGAY and SUN:
The Reply:
There are two or three states where this limit of

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1st July 2018 to be celebrated as ‘GST day’, to commemorate the first year of the unprecedented reform of Indian taxation
GST
Dated:- 30-6-2018

1st July 2018 to be celebrated as 'GST day', to commemorate the first year of the unprecedented reform of Indian taxation
GST is a fitting tribute to spirit of cooperative federalism as all decisions in the 27 meetings of GST Council taken by consensus
GST – 'ONE NATION, ONE TAX, ONE MARKET'- binds India into an Economic Union, promotes 'Make in India' and has improved 'Ease of Doing Business'
Introduction of e-way bill ensures hassle free movement of goods throughout the country
GST replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime
Government of India is celebrating the 1st Anniversary of the Goods and Services Tax (GST) coming into force, here tomorrow. GST was launched on the 1st July, 2017 in a majestic ceremony held in the Central Hall of Parliament on

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o the stage of manufacture and production while States had power to tax sale and purchase of goods. Centre had the exclusive power to tax services. This sort of division of taxing powers created a grey zone which led to legal disputes since determination of what constitutes a goods or service became increasingly difficult.
In the discussions that preceded amendment in the Constitution for GST, there were a number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country like India required the reconciliation of interests of various States with that of the Centre. Some of these issues included origin-based versus destination-based taxation, rate structure and compensation, Dispute Settlement, inclusion of Alcohol and Petroleum products under GST. Resolution of these issues took some time and finally, the Constitution (122nd Amendment) Bill, 2014 was introduced in the Parliamen

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ified on 12th April, 2017. All the other States (except Jammu & Kashmir) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 8th July, 2017 when the State of J&K also passed the SGST Act and the Central Government also subsequently extended the CGST Act to J&K. On 22nd June, 2017, the first notification was issued for GST and notified certain sections under CGST Act. Since then, one hundred and three notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. Thirteen, twenty eight and one notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further 59, 63, 59 and 8 rate related notifications each have been issued under the CGST Act, IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Similar notifications have been issued by all the States under the respecti

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levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both.
The introduction of e-way (electronic way) bill is a monumental shift from the earlier 'Departmental Policing Model' to a 'Self-Declaration Model'. It envisages one e-way bill for movement of the goods throughout the country, thereby ensuring a hassle free movement of goods throughout the country. The e-way bill system has been introduced nation-wide for all inter-State movement of goods with effect from 1st April, 2018. As regards intra-State movement of gods, all States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16th June, 2018.
GST will have a multiplier effect on the economy with benefits accruing to various sectors such as exporters, small traders and entrepreneurs, agriculture and industry, common consumers. GST has already promoted 'Make in India' and has improved the 'Ease of Doin

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l Anti-Profiteering Authority has initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. To expedite sanction of refund, manual filing and processing of refunds has been enabled. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches on the GST portal.
The introduction of GST is truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime. It will integrate India into a single, common market by breaking barriers to inter-State trade and commerce. By eliminating cascading of taxes and reducing transaction costs, it will enhance ease of doing business in the country and provide an impetus to 'Make in I

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GST applicability on Hostel Running Services
Query (Issue) Started By: – Rajat Singhania Dated:- 30-6-2018 Last Reply Date:- 5-7-2018 Goods and Services Tax – GST
Got 5 Replies
GST
Dear Members,
For a private institution which outsources its entire hostel facility to some third party for running and the said third party issues a monthly bill to the institution, GST would be levied @5% only on the fooding component or would the entire bill be subject to GST. If so, what rate of GST would be applicable.
The question arises because hostel services mainly consist of fooding and lodging services. For fooding services ,there was a circular issued in January 2018 which stated the rate of GST as 5% without ITC. But for the lodging pa

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Recoating of jigs
Query (Issue) Started By: – ashok amin Dated:- 30-6-2018 Last Reply Date:- 3-7-2018 Goods and Services Tax – GST
Got 4 Replies
GST
Dear Experts,
1) We manufacture jigs and clear it by charging 18% GST. Sometimes the consignee send the jigs back for re-coating it. The consignee prepares a returnable gate pass without mentioning any rate or value in it.
2) Sometimes we get jigs of other consignee's for re-coating and some sort of simple repair like straightening the hooks.
There is a negligible rate increase while sending the re-coating jigs to the consignee. My querry is should we prepare tax invoice with G S T charged or should we prepare only challan without charging G S T in it. Secondly, what should

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Ebbs and Flows of 365 days implementation of GST: Celebrating a year of learning!!
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 30-6-2018

Reeling from the messy implementation of demonetisation in November 2016, rolling out of half- baked Goods and Services Tax (“GST”) came as a tide in the lives of Indian businesses and taxpayers. Rightly learned from the natural law theory that being flawless is not something which happens at once, it's a process of crawling, falling and then learning to walk, but being awake to the ebbs and flows of this process, is what that marks success in long run. Learnings of GST in its past one year is no different…..
“Any change, even a change for the better, is always accompanied by drawbacks and discomforts.”
~ Arnold Bennett
With seeds initially sown by the then Prime Minister Shri. Atal Bihari Vajpayee in the year 2000, GST is definitely not an overnight thought. On July 1, 2017, history was created when the country wit

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l on businesses in initial months, but it might not be fair to judge its success on that basis. Nonetheless, with optimistic view of brighter and stable future, let us look back on the journey of GST so far to identify key hits and misses along with still needed improvements under 'work-in-progress' GST.
Kudos to GST…….
Simplified tax structure bringing ease of doing business in India:
Separate Taxes by Central Government, State Governments and the local governments had resulted in difficulties and harassment to the tax payers in complying with different types of taxes and their compliances. GST has certainly consolidated the multiplicity of taxes in India and has thus created a simplified tax regime. It has replaced around 17 federal and state levies to unify a country of 1.3 billion people into one of the world's biggest common markets to promote ease of doing business.
No more hit of double taxation on pockets of consumers:
Owing to Indian government's federal str

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ise duty, non-cenvatable taxes and cesses like CST etc. With seamless flow of input tax credit throughout the supply chain, GST has provided benefit of enhanced input tax credit pool for businesses with minimal cascading.
Continuous rationalisation of tax structure making commodities affordable for consumers:
Multiple tax rate structure in GST was long debated to cause unease of business when GST was envisaged as a powerful mechanism to bring system of uniform taxation. More particularly, highest tax rate slab of 28% was the centre of pain for taxpayers with even the commodities of general consumption falling in highest slab. Understanding concerns of the trade, the GST council has made wholesale shift of numerous items from the peak 28% tax slab to the more reasonable rate of 18% in last one year which has benefitted the trade a lot in terms of price hike control as well as international competitiveness. Consumers too can now afford various such commodities at affordable prices.
Co

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of E-Way Bill system results smooth movement of goods and thereby significant reduction of turnaround time for transportation:
After failing to face brunt of high volume of E- Way bills generated on very first day of launch in February 2018, due to which the provision got deferred till April 1, 2018, the government has managed to ensure smooth roll out of the E-Way Bill system since then. For intra-state movement of goods, the provision was implemented in a staggered manner by June, 2018. With removal of inter-state check posts, E-Way Bill system has led to quicker and smoother movement of goods, reducing the resultant turnaround time for vehicles. As per rating agency ICRA, in states such as Kerala, West Bengal, Maharashtra, Madhya Pradesh and Bihar, which were one time known for notoriously high waiting time spent at their borders, the impact has been much more pronounced.
More changes loom……
Robust GSTN network to handle compliances with least technical glitches:
A

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filing system and matching of credits:
Due to technical challenges, the matching concept as was initially envisaged could not take off at all. Consequently, interim procedure of filing summarised return in Form GSTR-3B with outward supplies details in Form GSTR-1 is in place. The GST council in its 27th meeting held on May 4, 2018, had approved the revised design of GST Returns that would require a taxpayer to file only one return every month and it sets a period of six months for the transition to take place. The process is designed in 3 stages, wherein stage 2 return will have facility for invoice-wise data uploads by the supplier and also facility for claiming credit on self-declaration basis by recipient, as in case of GSTR 3B now. After six months of this stage, the facility of provisional credit will be withdrawn and credit will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods.
It is utmost required that the system of return fil

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:
Negative list of GST ITC as prescribed under Section 17(5) of the CGST Act, 2017, blocks credit on specified items like motor vehicles, free samples, construction of office/ factory, etc. There is a strong need to prune down this list to allow credits in those cases where appropriate GST has been paid on its disposal. Further, expenses pertaining to sales promotional activities must be allowed and should not be barred in the name of personal consumption, free samples, gifts etc.
Challenges in inclusion of petroleum products in GST:
At the time when diesel and petrol prices were touching multi-year highs, Union Petroleum Minister, Shri. Dharmendra Pradhan had said that petroleum products should be included under GST to help consumers pay a rational price. While the centre wants liquor and petroleum products should come under GST, states are keen to retain their power to tax these items as they are major sources of revenue for them. The blocked road towards inclusion of liquor and p

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th GST Law part;
* Developing alternate ways rather than denying eligible credit to recipients in the guise of non-payment of taxes by supplier;
* Smooth and Fast disbursal of refunds on exports, though lots of efforts are being taken regularly to ease the process;
* Dispute Resolution mechanism in case of contrary judgments by two Authorities for Advance Ruling by formation Centralised Appellate Authority;
* Minimising state-wise differential provisions as to threshold or specified goods requirement for E-Way Bill in case of intra-state movement of goods as recently seen in Tamil Nadu, Delhi, Mizoram etc.
* Providing suitable link to determine jurisdiction of taxable authority of a taxpayer.
Our Comments:
Despite of being mocked as Gabbar Singh Tax by opposition, GST – the India's new unified nationwide value-added system of taxation has come a long way in simplifying the complex tax structure of the Country. The initial implementation issues which took a toll on businesse

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deed, it is heartening to see receptive approach of the Government in easing out practical challenges of the Trade through either FAQs, E-fliers, twitter account, notifications/circulars etc., but, with the quantum of rulings coming from respective states' Hon'ble Authority for Advance Ruling at high pace, it is also clear that still GST is a work in progress with lots of issues still unexplained and unearthed.
As GST's first anniversary passes, the Government is expected to tweak the tax regime through amendments during the monsoon session of Parliament in July. The objective would be to make it more simpler and friendlier with easy return filing process and credit matching system. Formats of annual return are still awaited which may also see practical challenges in understanding. Additionally, strengthening tax administration must also be on the cards. According to Ms Sarna, Chairperson, CBIC, it might take another couple of years or more for GST to completely stabilise and settle d

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In Re : Arpijay Fabricators Pvt. Ltd.
GST
2018 (8) TMI 284 – AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – 2018 (16) G. S. T. L. 157 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – AAR
Dated:- 30-6-2018
Final Order No. 04/2018
GST
Shri Rajeev Agrawal, Joint Commissioner, And Commissioner CGST And Central Excies And Shri Manoj Kumar Choubey, Joint Commissioner of State Tax, Commircial Tax Division
For The Applicant : Krishan Garg, Praveen Gupta And K. Soni
RULING
1. At the outset we would like to make it clear the provisions of both the CGST Act, 2017 and the MPGST Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such similar provisions, a reference to the CGST Act, 2017 would also mean a reference to the same provisions under the MPGST Act, 2017.
2. BRIEF FACTS OF THE CASE:
2.1 M/s. Arpijay Fabricators Private Limited (hereinafter referred to as 'the Applicant'), having their registe

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tions have been posed before the Authority, with reference to the activity undertaken by the Applicant:
3.1 Whether the supply mode by us is to classified as supply of goods or supply of services?;
3.2 What would be the appropriate classification and applicable rate of tax for the above transaction?
4. DEAPRTMENT'S VIEWPOINT:
Central/MPGST Act, 2017 section 2 read with section 8-in the case of bus body building there is supply of goods and services. Thus, classification of the composite supply as goods or service would depend on which supply is the principle supply which may be determined on the basis of facts and circumstances of each case.
5. RECORD OF PERSONAL HEARING:
5.1 Shri Krishan Garg, CA; Shri Praveen Gupta, Accounts Manager of the Applicant and Shri S. Soni, Assistant Accounts Manager of the Applicant appeared on behalf of the applicants for personal hearing on 22.06.2018 and reiterated the submissions already made in the application. They also sought a day's time to

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as given us job work for making body on chasis. Thus it is not the case of only supply of goods'.
We, therefore of the view that supply made by us is a composite supply of goods and services, however, since the predominant intention of the buyer here is to get services, hence it should be classified as services and should be charged GST @18%'
6. DISCUSSIONS AND FINDINGS:
6.1 We have carefully considered the submissions made by the applicant \n the application. We find that the activity and the question raised before us has been suitably clarified and dealt with in Circular No.34/08/2018-GST dtd.01.03.2018, where in the Fitment Committee to GST Council in its meeting held on 9th , 10th & 13th January has clarified this particular issue. The same is reproduced hereunder-
ISSUE- Whether activity of Bus Body Building, is a supply of goods or services?
CLARIFICATION – In the case of bus body building there is supply of goods and services. Thus, classification of this composite supply

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f two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply;” The term 'Principal Supply' has been categorically defined under Section 2(90) of the CGST Act 2017 and corresponding entry in MPGST Act, 2017; '”Principal Supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.'
6.4 Though the Applicant, in their additional submission dtd.23.06.2018 have briefly described the process being undertaken by them during the course of body building of buses, they have not come forward with the details of component of 'Goods' and 'Services' involved in the supply under question. However, they have pleaded that though the supply in this case would be a 'Composite Supply' but depending upon the predominant intention of the buyer, it should be classified as 'Service'. On a careful consideration of submissions mad

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able as per Heading No.9988. However, due to incomplete information provided by the Applicant, the Authority finds itself constrained to provide any definitive ruling on this aspect.
RULING
7. The Advance Ruling on questions posed before the authority are answered as under:
7.1 In respect of Question 1, we hold that the activity of Body Building undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to 'Composite Supply' as define under CGST Act 2017/MPGST Act 2017;
7.2 In respect of Question No.2, we hold that the rate of tax on such Composite Supply would be determined by the predominant component involved in such Composite Supply in terms of Section 8(a) of the CGST Act 2017, depending upon the character of the body being built on the chasis, which would eventually be classifiable under Chapter 87 of the Tariff. On the other hand, if the predominant element happens to be the Service part, then the Principal

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States will get to levy additional taxes on top of 28% GST on petrol, diesel: Modi
GST
Dated:- 29-6-2018

New Delhi, Jun 28 (PTI) – Petrol and diesel when brought under GST will involve a peak tax rate of 28 per cent plus states getting to levy some tax, keeping the retail rates at almost the same level as they are currently, Bihar Deputy Chief Minister Sushil Kumar Modi said today.
Modi, however, said it will take some time for states to get around to including petrol and diesel in the GST and the Council will take a final call on the timing.
If petrol, diesel are to be brought into GST, then states will be allowed the levy taxes on top of 28 per cent to prop up revenue. It will take some time to include petrol, diesel in GS

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uty on petrol and ₹ 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) – the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
The total tax incidence on petrol comes to 45-50 per cent and on diesel, it is 35-40 per cent.
Under GST, the total incidence of taxation on a particular goods or a service has been kept at the same level as the sum total of central and state levies existing pre-July 1, 2017. This was done by fitting them into one of the four GST tax slabs

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cut the tax just once in October last year by ₹ 2 a litre.
This led to its excise collections from petro goods more than doubling in last four years – from ₹ 99,184 crore in 2014-15 to ₹ 229,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from ₹ 137,157 crore in 2014-15 to ₹ 184,091 crore in 2017-18.
GST subsumed more than a dozen central and state levies like excise duty, service tax and VAT when it was implemented from July 1, 2017.
However, its implementation on five petro products – petrol, diesel, natural gas, crude oil and ATF was deferred. This resulted in the industry losing on revenue as they were not able to offset GST tax they paid on input from those paid on the sale of

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GST department is sending notices for input mismatch
Query (Issue) Started By: – SARAVANAN RENGACHARY Dated:- 29-6-2018 Last Reply Date:- 5-7-2018 Goods and Services Tax – GST
Got 4 Replies
GST
Dear Experts,
GST department has started to send notices to assesses in Form GST ASMT 10 seeking clarification for the mismatch of input credit between GSTR3B and GSTR2A. i.e. Quarter Oct to Dec'17.
When GSTR2A tool is not functioning, it is mandatory for the assesses to check the availability of credit in GSTR2A while availing the credit.
Regards
Saravanan
Reply By Ganeshan Kalyani:
The Reply:
Presently the mechaniwm of GSTR2A reconciliation is bot in operation. So the assesse has been allowed to take credit on self declarati

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Reverse Charge Mechanism for Supplies from Unregistered Persons Deferred Until September 30, 2018, Under IGST & CGST Sections.
Notifications
GST
GST on Reverse Charge Mechanism (RCM) u/s 5(4)

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Embroidery
Query (Issue) Started By: – Shashikumar Guntuka Dated:- 29-6-2018 Last Reply Date:- 6-7-2018 Goods and Services Tax – GST
Got 5 Replies
GST
He'll sir,
I am proprietary of zari embroidery. I am confused regarding gst applicable to business and I am purchase cloth and embroidery on it with different materials like chemkki , zari articles, baids etc, whether if client will provide cloth it will treat as goods or services and what rate, HSN OR SAC
Reply By KASTURI SETHI:
The Reply:
Here is an extract of FAQ dated 28.9.17. You may see the relevant HSN of your product for latest rate of tax in GST tariff. There are changes in rate of tax depending upon the item you manufacture/supply. Your item is manufactured

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es with chikan work, banarasi sarees and other sarees?
1 The GST rate on all sarees of silk, cotton or man-made fabrics [whether or not with embroidery or chikan work] is 5%.
2 However, GST rate on sarees woven of metal thread or metallised yarn under HS code 5809 is 12%.
Reply By Shashikumar Guntuka:
The Reply:
Sir,
Can you clarify me whether Embroidery work will come under Goods or Services and also I have question about whether it will cover under job work. Give me applicable HSN or SAC
Reply By KASTURI SETHI:
The Reply:
It is goods as already replied. Job work can be got done. Exact HSN depends on the type of textile on which embroidery work is to be done i.e. whether it is cotton, man-made etc.
If you want further clarific

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Export related issues
Query (Issue) Started By: – Shashikumar Guntuka Dated:- 29-6-2018 Last Reply Date:- 2-7-2018 Goods and Services Tax – GST
Got 2 Replies
GST
what is the date is taken for export under GST regime. Invoice date / Shipping bill date / Bill of Lading (or) Airway Bill date? for example invoice date : 10.07.2017 , shipping billdate : 18.08.2017, bill of lading (or) Airway bill date 24.08.2017 which one is correct ? why ?
Q2 : what is the correct conversion rate? whic

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GST Council to Meet On 2ist July
GST
Dated:- 29-6-2018

The 28th meeting of the GST Council will be held in New Delhi on Saturday, the 21st of July, 2018 from 11:00 hours.
Prior to that,

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In Re: M/s. B.M. Industries
GST
2019 (2) TMI 1080 – AUTHORITY FOR ADVANCE RULING, HARYANA – 2019 (22) G. S. T. L. 293 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, HARYANA – AAR
Dated:- 29-6-2018
AAR No. HAR/HAAR/R/2018-19/02 (In Application No. 1/2018-19)
GST
SANGEETA KARMAKAR AND VIJAY KUMAR SINGH, MEMBER
Present for the Applicant: Pankaj Malik, CA & Sh. Harish Arora, Finance Manager, B.M. lndustries, Yamunanagar.
1. As per facts stated by Sh. Rajesh Kumar, Prop. M/s. B. M. Industries, 33, Industrial Estate, Phase-II, Yamunanagar (Haryana) [hereinafter referred to as the “applicant”], the firm is a going concern engaged in manufacture and sale of aluminium profiles, owning fixed assets, current assets and also has long term as well as current liabilities. The applicant proposes to merge as GOING CONCERN with M/s. Bimal Aluminium Pvt. Ltd., Yamunanagar, having GSTN 06AAACB6210G1Z9. That consequent to merger the proprietorship firm M/S B. M Industries, owned by

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te limited company on the fixed assets and currents assets including stocks of raw material, semi-finished and finished goods.
b) Whether the input tax credit available in the credit ledger account or cash ledger account of proprietorship firm shall be transferred to the respective credit ledger and cash ledger account of the private limited company, consequent upon merger.
Comment of the Officer under section 98 (1) of the CGST. HGST Act 2017
The DETC (ST), Jagadhari had submitted his comments on 18.06.2018, wherein the legal provisions as contain in section 41 and section 85 of the CGST/HGST Act, 2017 have been reproduced without any observation viz a viz the facts of the case.
RECORDS OF PERSONAL HEARING – 2ND PROVISO TO SECTION 98(2) OF CGST/HGST ACT 2017
4. Opportunity for personal hearing was granted to the applicant on 20.06.2018, which was attended by Sh. Pankaj Malik, Chartered Accountant, on behalf of the applicant. He made following submissions:
(a). That the merger o

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business. The selling of business is not the business of the applicant. It, in fact, cannot be called a transaction in the normal course of business or for furtherance of business. It is an extraordinary activity which shall bring the business to an end in the hands of the applicant although it will continue to operate with regularity and permanently in the hands of the buyer i.e. M/s. Bimal Aluminium Pvt Ltd. As the action of the applicant is not in the regular course of business nor it has the impact of furtherance of business, therefore, the activity cannot be termed as supply as per Section 7 e hence exempt from the payment of tax.
5. Reference was made to the provisions of Schedule II of the CGST Act 2017 specifies the activities to be treated as “Supply of Goods or Supply of Services” and it was submitted that as per Para 4(c) of subject schedule, transfer of business as a going concern is not treated as supply. The applicant also referred to Notification no. 12/2017-Central Ta

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circumstances of the Rajashri foods (P) Ltd case, hence the ruling is fully applicable to the applicant's case. The Ld. Advance Ruling Authority, Karnataka has given the ruling that:-
“1. The transaction of transfer of business as a whole of one of the units of the Applicant in the nature of a going concern amounts to supply of service.
2. The transactions of transfer of one of the units of the Applicant as a going concern is covered under Sr. No 2 of the notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 subject to the condition that the unit is a going concern.”
7. The applicant quoted the provisions of Section 18 of the CGST Act 2017 and Rule 41 of CGST Rules and submitted that Section 18(3) read with Rule 41 allows the transfer of the input tax credit shown in the account of the Applicant as balance of the Electronic Cash Ledger and The Electronic Credit Ledger to the respective ledgers of M/s. Bimal Aluminium Pvt. Limited subject to observance of conditions prescribe

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nic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.”
Further, Rule 41 of the CGST/HGST Rules, 2017, provides as under:
“RULE 41. Transfer of credit on sale, merger, amalgamation, lease or transfer of a business:
(1) A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC-02, electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee:
Provided that in the case of demerger, the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.
(2) The transferor shall also submit a copy of a certificate issued by a practicing chartered accountan

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is further observed that Section 7 of the CGST/HGST Act, 2017, defines the scope of supply, which includes sale, transfer, barter, exchange made for a consideration in the course of or for furtherance of business and also provides vide clause (d) to sub-section (1) that the activities to be treated as supply of goods or services as referred to in Schedule ll.
As per Schedule II of the CGST/HGST Act 2017, para 4 pertain to transfer of business assets and clause (c) of para 4, provides as under:
(a) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be taxable person, unless-
(i) The business is transferred as a going concern to another person; or
(ii) The business is carried on by a personal representative who is deemed to be a taxable person.”
Thus, we find force in the contentions raised by the appli

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