This weekly round- up analytically summarizes the key stories related to the Authority for Advance Ruling( AAR) ,reported at Taxscan.in during the previous weeks from October 1 to 15th, 2022.
The Authority of Advance Rulings (AAR) , Haryana has recently clarified that security services provided by a Limited Liability Partnership are not taxable under Reverse Charge Mechanism (RCM). With the applicant, M/S AS & D Enterprise LLP, arguing that as per the provisions of section 2(98) of CGST Act, the liability to pay tax is fixed on the recipient of the supply of goods or services instead of the supplier in respect of notified categories of goods or services, the AAR, however observed that from the LLP Act, 2008, the main features inter alia are that the LLP shall be a body corporate and a legal entity separate from its partners, and hence, that on the basis of the same, Reverse Charge Mechanism was not applicable in this case and that tax shall be paid on forward charge basis by the supplier(AS & D Enterprise LLP).
The Authority for Advance Rulings (AAR), Gujarat bench has held that GST is not leviable on the provision of transportation and canteen facilities through third parties to the employees as per the contract. The aforesaid observation was made by the Authority while the applicant, M/s SRF Limited, a multi-business chemicals conglomerate engaged in the manufacturing of industrial and specialty intermediates, contended that the canteen facilities as well as the service of bus transportation is being provided to the employees of the company and not by the applicant to its employees ,as a part of its HR policy, wherein bus transporters are raising monthly invoices along with GST thereon to the Applicant and a small portion of such charges are being recovered by the Applicant from its employees as per internal HR policy.
With the applicant M/S Kirloskar Oil Engines seeking an advanced ruling on the tax rate of the good ‘HTP Kirloskar Power Sprayer’ and the fixation of the HSN number, the tax for Mechanical Sprayer being fixed at 12% whereas the GST for agriculture and horticulture sprayer being classified at 18%, the Gujarat Bench of Authority for Advance Ruling (AAR) has held that, the Good and Services Tax (GST) at rate of 18% is applicable to ‘HTP Kirloskar Power Sprayer’ manufactured by M/s. Kirloskar Oil Engines Ltd. and the 8 digit Harmonised System of Nomenclature(HSN) code is 8424 89 90.
While the applicant, M/S. Shakti Marine Electric Corporation, a wholesale dealer for the supply of combined Wire Rope manufactured by M/S Kadambari Steel Wire Rope Pvt.Ltd and M/s Usha Martin India Limited, stated that Combined Wire Rope Chapter Heading 73121 ,has got wide usage in General Engineering, Fishing Vessels and also in General Vessels, thus are eligible for 2.5% CGST as per Sr.No.252 of Schedule -I of Notification No. 1/2017-Central Tax (Rate),2.5% SGST vide corresponding Notification issued by Gujarat State Government and 5% IGST Notification No. 1/2017-ITR, the same being used as a part of Fishing Vessels, the Gujarat Bench of the Authority for Advance Rulings (AAR) has held that combined wire rope is not used as part of the fishing vessel and is not eligible for GST at 5 %.
The West Bengal Authority of Advance Ruling (AAR), has held that the supply of services for the plantation of mangrove seeds and seedlings in coastal areas attracts 18% GST. The aforesaid observation was made when the applicant, M/s Raj Mohan, a company engaged in the business of cultivation, planting and nurturing of fruit trees in marginalised areas and mangrove seeds and seedlings in coastal areas, sought an advance ruling in respect of the SAC Code and GST Rate for the outward supply made by the applicant, in the case of fruit trees being cultivated and nurtured in marginalised communities. The authority held that such supplies of services may be treated as environmental protection services under chapter heading 9994 and shall not be covered under chapter heading 9986, being support services to agriculture, forestry, fishing, and animal husbandry.
The Gujarat Bench of the Authority for Advance Rulings (AAR) has ruled that the activity of fabrication & mounting of Tanker and Tripper on chassis supplied and owned by the principal, is a supply of Service and attracts 18% of GST. The aforesaid observation was made by the authority when M/s. Hasmukhlal Jivanlal Patel, the applicant , engaged in building bodies of various vehicles falling under Chapter 87 of the First Schedule to the Customs Tariff Act, submitted that the activity undertaken by them was in the nature of working on the goods, and that as per the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and corresponding SGST/ IGST Notifications, their services would be covered under the main head of 9988 which reads as under: “Manufacturing services on physical inputs (goods) owned by others”. The authority however held that the activity of fabrication and mounting of Tanker and Tripper on the chassis supplied and owned by the principal is supply of Service and that the rate of tax in both the cases if chassis is supplied by the registered person (principal) and un-registered person (principal) would be 18% as per Entry No. 26 (ic) and 18% as per Entry No. 26(iv) respectively.
With the applicant, M/s. Himalayan Flour Mill Private Limited,
submitting that based on the memo no. 569(3)-FS/Sectt./Food/4P-02/2016/2021, dated 18th February 2022, issued by the Department of Food and Supplies, Government of West Bengal, explaining the full process of crushing of wheat into Fortified Atta for Public Distribution System, the maximum value of involvement of goods being less than 25% of the total value of composite supply ,the said process would qualify for exemption as per entry no. 3A of Notification no. 12/2017-CT (Rate) read with State Notification no. 1136-FT dated 28th June 2017, the West Bengal Authority for Advance Ruling (AAR) has held that the Instant composite supply of service of milling of food grains into flour, to Food and Supplies Department, Govt. of West Bengal, would attract Nil GST.
The Appellate Authority for Advance Ruling (AAAR), Gujarat, while upholding the ruling of the Gujarat AAR, has held that the parathas would attract 18% GST unlike Plain Chapatis. With the appellant, M/s Vadilal Industries, submitting that the Parathas supplied and sold by them in packed condition are to be placed directly on pre-heated flat pan, and further that roti, chapatti which is unleavened bread of Indian origin like paratha, wheat flour is predominant material and therefore that Paratha, having close resemblance of roti and chapatis would be chargeable to GST @5%, the AAR has held that 18% GST would be applicable to the product since that parathas are not ready for consumption product but requires 3-4 minutes of cooking as well as they are not akin to roti or chapattis which are primarily wheat flour product, and further that HSN 1905 covers already prepared or cooked products.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
