In Re: Sterlite Technologies Limited
GST
2018 (9) TMI 975 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (17) G. S. T. L. 518 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 12-9-2018
GST-ARA-41\/2018-19\/B-112
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
\nPROCEEDINGS
\n(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
\nThe present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Sterlite Technologies Limited, the applicant, seeking an advance ruling in respect of the following questions :-
\n1.1. Whether the Applicant is required to separately discharge GST on the excess length of OF although the cost of such excess length is already included in the price charged to independent customers?
\n1.2 Whether the Ap<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n G ON THE QUESTION(S) ON WHICH THE ADVANCE RULING IS REQUIRED = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n actured and winded up in exact length, any damage to the loose ends would render entire length OF in the spool unusable owing to shortfall in maintaining standard length. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ssessable value may be invoked. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n estigation being undertaken by them on the same issue as raised by the applicant in their Advance Ruling Application. However the full facts and details of the investigation are not being reproduced here for the sake of confidentiality of investigation proceedings. However only relevant paras with respect to initiation of proceedings is reproduced below:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rest of Rs. 24,73,379\/- and submitted the detailed work-sheet of entries against which they availed irregular ITC. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n declare before Authority of Advance Ruling, in para 17 of form GST ARA-01 that whether question raised in the application is already pending or decided in any proceedings in applicant's case under any provisions of the Act. The fact that the case has been booked against the taxpayer on the said issue in the month of April 2018 i.e. well before making this application, which is under investigation, needs to be co-related with the declaration submitted by the taxpayer in form GST ARA-01. The admissibility of the application may be dealt with accordingly and any mis-declaration made by the taxpayer may be taken up as per provisions of the Act. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n at the Assistant Commissioner (Preventive), CGST Commissionerate, Aurangabad may be made a party to the subject issue and comments \/ views may be taken before deciding the issue. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n information about the investigation action taken during 02\/04\/2018 to 03\/04\/2018 by Central GST office. Hence, it is clear that M\/s. Sterlite Technologies Ltd. (GSTIN k7AAEC58719BIZC) has applied in Form GST ARA 01 before Hon. Authority for Advance Ruling only after initiation of investigation by the Preventive officers of CGST office, Aurangabad on basis bf searches conducted on 02\/04\/2018 and 03\/04\/2018. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n sue with respect to admission or rejection of application. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ejection of the application have been held on various dates and details of the same are already produced above. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n proceedings. However in their oral and written submissions their only contentions is that no proceedings for denial of admission of the ARA application can be stated to be initiated against them until Show Cause Notice in this respect has been issued to them. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s authorised representative, by order, either admit or reject the application: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: Sterlite Technologies LimitedGST2018 (9) TMI 975 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (17) G. S. T. L. 518 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AARDated:- 12-9-2018GST-ARA-41\/2018-19\/B-112 GSTSHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 … Continue reading “In Re: Sterlite Technologies Limited”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13770","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/13770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13770"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/13770\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\n1. This Application is being preferred by Sterlite Technologies Limited, Maharashtra (“Company”\/”Applicant”), a company incorporated in India under the provisions of the Companies Act, 1956 having its registered office at E-1, E-2,E-3, MIDC Waluj, Aurangabad-431136, Maharashtra, India.
\n2. The Applicant is engaged in providing goods and services which qualify as 'supply' as per provisions of the Central Goods and Service Tax Act, 2017 (“CGST Act”) and is duly registered thereunder bearing GSTIN 27AAECS8719B1ZC.
\n3. The Company is engaged in manufacturing of products which inter alia includes preform, Optic Fibre (“OF”) and Optic Fibre Cable (“OFC”). The process flow for manufacturing OFC involves manufacture of preform which is used for manufacture of OF and such Of is then used for manufacture of OFC. Diagrammatic presentation of the OFC manufacturing process is as under:
\nStep I
\nStep II
\nStep III
\nStep IV
\nSilica <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n6. To overcome these practical challenges whilst ensuring that of manufactured by STL retains its minimum required length, each lot of OF is manufactured and supplied with marginally surplus length (e.g. 1-2 meter surplus length in a spool that ought to contain Of in multiples of 2.1 kilometre in length). The practice to manufacture and supply of in excess length is a standard practice across industry and all the supplies being made (both to STL's unit in Rakholi and Dadra as well as third party customers).
\n7. Usable length of OF (in multiples of 2.1 km\/4.2 km) which is mentioned on the invoice (which the customer has placed an order and agreed to pay) is considered as 'usable quantity' whereas the actually supplied quantity (which is marginally surplus than the standard length-not usable) is known as &<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n10. Further, since supply of OF to its own units in Dadra and Nagar Haveli is treated as supply between distinct persons, the assessable value is determined under Rule 28(a) of the CGST Rules based on 'Open Market Value' which is independent of cost incurred for manufacture of excess length. In other words, as long as the open market value is available and is not disputed, cost of manufacturing excess length is immaterial to arrive at the assessable value.
\n11. However, for the identical reason of absence of any price being earmarked for excess length of OF and in view of the provision of Entry No. 2 of Schedule 1 of the CGST Act which provides to treat a transaction between distinct persons as a 'supply' even in absence of any consideration, there is possibility that the 'open market value' arrived at for delivered quantity, which inter alia includes cost of excess length, would be disputed
\n12.Given the above background, presen<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n“At the outset it is to submit that the issues for determination raised by the taxpayer has been placed before Authority of Advance Ruling, only after initiation of investigation by the preventive officers of GST Commissionerate, Aurangabad on the basis of searches conducted on 02.04.2018 and 03.04.2018 and consequent follow-up actions conducted by the department including statements of the key persons recorded under Section 70 of the CGST Act, 2017.
\nIn this connection, your attention is invited towards proviso to Section 98 of the CGST Act, 2017, (similar provision has been given in proviso to Section 98 of the Maharashtra GST Act<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nIt is also pertinent to mention here that the taxpayer at nowhere in the invoices issued have mentioned that the cost of excess length is already included in prices charged to customers. The prices charged to the customers are as per purchase orders placed by customers and only towards the invoiced quantity and not for excess lengths.
\nThis is issued with the approval of the Joint Commissioner (Preventive), GST & Central Excise, Aurangabad. Joint Commissioner (Preventive) GST & Central Excise, Aurangabad has submitted report vide letter dated 24.07.2018
\nPlease refer to this office letter of even number dated 12.07.2018 on the above subject.
\nAt the outset it is to submit that the issues for determination as raised by the taxpayer has been placed before Authority of Advance Ruling, only after initiation of investigation by the preventive officers of GST Commissionerate,<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nIt is also pertinent to mention here that the taxpayer at nowhere in the invoices issued have mentioned that the cost of excess length is already included in prices charged to customers. The prices charged to the customers are as per purchase orders placed by customers and only towards the invoiced quantity and not for excess lengths.
\nIt is i<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nThis is issued with the approval of the Commissioner, GST & Central Excise, Aurangabad.
\nFurther, Dy. Commissioner of State Tax, Large Tax Unit, (AUR-VAT-E-003) Aurangabad Division, Arangabad has submitted following report.
\nM\/s. Sterlite Technologies Ltd (GSTIN 27AAEC58719BIZC) has applied in form GST ARA 01 for Advance Ruling under section 98 (CGST ACT 2017) before Hon. Authority for Advance Ruling, Maharashtra, Mumbai on 19th June 2018. The hearing is scheduled for acceptance or rejection of said application, on 17\/07\/2018. Being the Jurisdictional officer (DGST-AUR-VAT-E003.Aurangabad) I am directed to attend for primary hearing and represent the case with Legal submission.
\nIn this regard the Taxpayer, M\/S Sterlite Technologies Ltd (GSTIN 27AAEC58719BlZC) was communicated and asked to attend to this offi<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nHon. Sir, in this connection, your attention is invited towards proviso to Section 98 of the CGST ACT 2017 (similar provision has been given in proviso to section of the Maharashtra GST Act 2017) wherein specially provided that:
\n “The Authority for Advance Ruling shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act”.
\nIn view of provisions given in the CGST Act 2017, and Maharashtra GST Act 2017, the application submitted by M\/S. Sterlite Tech<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nAs requested opportunity to present their side of the case was granted to CGST Commissionerate, Aurangabad wherein Sh. Sandeep Vaichal Supt. Appeared on 28.08.2018 and made written submissions and stated that the department is investigating the matter on the same issue for which advance ruling application is made by the applicant.
\n05. OBSERVATIONS
\nWe have gone through the facts of the case and the written submissions made by both, the applicant and the departmental authority. We find that
\n1. The Company is registered person under GST Act and engaged in manufacturing of products which inter alia includes preform, Optic Fibre (“OF”) and Optic Fibre Cable (“OFC”). The optical fibre (OF) as manufactured by the Applicant is supplied to its units located in Rakholi and Dadra as well as to third party customers on payment of appropriate GST. Such OF is then further used for manufacture of OFC.
\n2. The applicant submitted that sup<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n5. During the course of hearing, we find that jurisdictional officers have raised the objection with regard to admission of this advance ruling application and requested that it is to be rejected as the same issue is pending before the investigation authority on the same questions as raised in the application put forth before ARA Authority. In connection to the same the officers have invited our attention towards proviso to Section 98 of the CGST Act, 2017, (similar provision has been given in proviso to Section 98 of the Maharashtra GST Act, 2017), wherein it is specifically provided that “the Authority for Advance Ruling shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act” and further stating that in view of the express provisions gi<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n8. However the contentions of the applicant are not sustainable in view of there being no difference with regard to the fact that searches were conducted against the applicant on 02.04.2018 and 03.04.2018 on the same issue as raised in the application and consequent follow up actions against them have also been conducted by the department as part of the investigations including recording of statements of key persons under Section 70 of the GST Act, 2017.
\n9. The contention of the applicant that no proceedings can be stated to have been initiated against them until Show Cause Notice is issued to them is not tenable in view of the very clear position that Show Cause Notice is a form of charge memo\/charge sheet filed which is <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nProvided that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act:
\nProvided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant:
\nProvided also that where the application is rejected, the reasons for such rejection shall be specified in the order.
\n12. Thus the application filed by the applicant is not maintainable as per the provisions of Section 98 of the CGST Act, as proceedings are already initiated against them before the filing of their present application.
\n13. The various case laws referred to by the applicant in their submissions are in different context and are therefore not relevant in the present proceeding before this authority. The provision in the law is <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n