This weekend summary provides an analytical synopsis of the most major stories of Goods and Service tax Authority for Advance Ruling ( AAR ) and Appellate Authority for Advance Ruling (AAAR) that were authored at Taxscan.in during the one week from to February 19 to March 3, 2023.
The Bengaluru bench of M P Raviprasad and Kiran Reddy Authority for Advance Ruling ( AAR ) has held that the supply of frozen foods attracts 18 per cent Goods and Service Tax.
The bench determine that applicant is in to manufacture of ready to eat food which are processed food products that are pre-cleaned, pre-cooked, packaged, but not ready for consumption without thawing, heating, reapportioning and repacking. The applicant also manufactures ready-to-cook foods which are processed food products which need post-manufacturing preparations like thawing cooking and addition of vegetables and proteins at institutional buyers end”.
The Tamil Nadu Bench Of N. Usha (SGST Member) and R. Gopala Swami (CGST Member)Authority of Advance Ruling )has held that the Goods and Service Tax would be applicable on the products manufactured as pasteurised milk and milk cream in the name of “Jigarthanda”
The bench of observed that, “As per “goods” defined under Section 2(52) of CGST Act, 2017 means, Jigarthanda manufactured using various ingredients or inputs was in the form of semi-solid form, as stated by the applicant, would satisfy the definition of “goods” and accordingly, “Jigarthanda” would be treated as good.
The Chhattisgarh Authority for Advance Ruling (AAR) has held that service provided by Chhattisgarh Housing Board was not eligible for Goods and service Tax at nil rate.
The bench of Sonal Misra and Abinav Agarva of authority of advance ruling that service provided by the application relation to maintenance of various colonies developed by Chhattisgarh Housing Board and not handed over to the local authority by CGHB are not eligible for the benefit of nil rates GST.
Further bench determined that As per the Article 243G and 243W of Indian constitution entrusted the function to municipalities, and panchayat and other local authorities therefore supply of security guard is forthcoming from the tender document could not be termed as functions entrusted to a panchayat or municipality.
The Tamil Nadu bench of R. Gopala swami (Additional Commissioner) and N. Usha (Joint Commissioner Authority for Advance Ruling (AAR) has held that 5% of Goods and Service Tax (GST) would be applicable to supply of dried Coconut manufactured and supplied by EMS COCO.
The bench determine that finance ministry circular 163/1923 GST held that, “The whole unbroken kernel could be taken out of the shell only when it converts to copra. The Applicant takes the copra cut into half, sun dries and segregates manually based on the round shape of copra, free of dirt/dust and sends it as edible copra and the rest of copra which are irregularly shaped, dusty are sent to oil milling units. But as the Circular clearly states, Copra is classified under heading 1203 irrespective of use.” As the impugned goods of the Applicant was only Copra and the same would be classified under Heading 1203 the authority held that GST rate of 5% would be applicable by entry at SL. No. 66 of Schedule I of 1/2017-Central Taxes (Rate) dated 28.06.2017.
The West bengal bench Brajesh Kumar Singh, (Joint Commissioner-CGST) and Joyjit Banik, (Senior Joint Commissioner-SGST) of Authority for Advance Ruling (AAR) has held that the service of milling wheat into flour would be eligible for Goods and Service Tax (GST) exemption as the value of goods had exceeded 25% than the value of supply.
The Bench Ruled That “This composite supply of services by way of milling of wheat into flour (atta) to Food & Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the value of goods involved in such composite supply does not exceed 25% of the value of supply.
The West Bengal bench of Brajesh Kumar Singh (Joint Commissioner-CGST) and Joyjit Banik, of Authority for Advance Ruling (AAR) has held that the job work retaining gold on account of wastage beyond the permissible limit would be liable to 5% of Goods and Service Tax.
The bench further observed that the activities carried out by the applicant would come within the purview of job work as defined in the GST Act. It was also observed that and the excess wastage allowed to the applicant would be considered as non-monetary consideration for determination of value of supply of job work services as the price was not the sole consideration for the supply. Therefore, the value of supply of services, making charges on which the applicant is liable to pay tax @ 5% would be determined as per provision of section 15 of the GST Act read with rule 27 of the CGST/ WBGST Rules, 2017.
The Bench held that the applicant who retained 10 gm of pure gold on account of wastage which was beyond the permissible limit of wastage in the nature of normal loss, the value of pure gold so retained by the applicant would form a part of value of supply of job work services and would be liable to 5% of GST
The West Bengal bench of Brajesh Kumar Singh, (CGST Member) and Joyjit Banik, (SGST Member) of Authority for Advance Ruling (AAR) has submitted that the milling of wheat into flour to the government of West Bengal for public distribution system would be eligible for Goods and Service Tax (GST) exemption.
The bench determined that In the instant case, value of supply shall be the consideration in money as well as non-cash consideration, as discussed. This composite supply of services by way of milling of wheat into flour (atta) to Food & Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the value of goods involved in such composite supply does not exceed 25% of the value of supply.”
The Karnataka bench of Ranjana Jha and Shikha C of Appellate Authority for Advance Ruling (AAAR) has upheld that consideration received from prospective buyers, whether as advances or full payment, before completion of development works on land for selling them as plots, are not taxable under the Central Goods and Services Tax (CGST) Act, 2017.
The ruling provides clarity to the real estate sector on the taxability of consideration received from prospective buyers before the completion of development works on land. The ruling also emphasizes the need to differentiate between the sale of land and the development of land, which are two distinct activities.
The West Bengal bench of Brajesh Kumar Singh (CGST Member) and Joyjit Banik, (SGST Member) Authority for Advance Ruling ( AAR ) has held that Goods and Service Tax ( GST ) would be applicable on the desilting of the foreshore of Prakasam Barrage to the Andhra Pradesh Government water resource department.
The Authority determined that the supply undertaken by the applicant to the Water Resource Department, Government of Andhra Pradesh for desilting of the foreshore of Prakasam Barrage was a composite supply of works contract involving predominantly earthwork and would be taxable vide entry No. 3 (vii) of the Notification No. 39/2017- Integrated Tax (Rate) dated 13.10.2017, as amended
The Tamil Nadu bench of Mandalika Srinivas, Member (Centre) And Dheeraj Kumar, Member (State) state Appellate Authority for Advance Ruling ( AAAR ) has stated that Goods and Service Tax ( GST ) would be applicable to work contract services for the construction of residential quarters for the employees of Nuclear Power Corporation of India Ltd ( NPCIL ).
The authority observed that , as per amendment made to the entry 3(vi) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 vide Notification No. 15/202l-C.T.(Rate) dated 18.11.2021 effective from 01.01.2022, ‘Government entity’ would be omitted in the class of recipients. Therefore, the applicable rate of tax for the above work would be 9% of COST plus 9% of SGST as per entry SI.No. 3(xii) of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 (as amended) read with the corresponding Notification under TNGSTA.
The Tamilnadu bench of N Usha and R Gopalaswamy Authority for Advance Ruling (AAR) has recently held that bus body building activity attracts 18 percent Goods and Service Tax.
the authority ruled that “activity of bus body building undertaking on the chassis supplied by the customer to the applicant amount to supply of service as per schedule II cause 3 Of CGST Act 2017 and will be attract 18% GST.
The Karnataka bench of Ravi Prasad (state member) and Kiran Reddy T (central member) Authority for Advance Ruling (AAR) has held that the Chamundeshwari Electricity Supply would be eligible for Input Tax Credit (ITC).
The Authority observed that, As per Section 16(1) of CGST Act 2017 every registered person would be entitled to take credit of input tax charged and input tax means tax charged on any supply of goods or services or both made to him.
Regarding the input tax credit on auxiliary services, subject to section 17(2) of the CGST Act read with Rule 42 and 43 of CGST Rules, the applicant would be eligible to claim input tax credit on the inward supply of services against output taxable supplies of support and auxiliary services and other supply of taxable goods, further observed.
The Maharashtra bench of Rajeev Kumar Mital and Dr D Srinivas Appellate Authority for Advance Ruling ( MAAAR ) ruled that the supply of assistance in the design and development of patterns used for the manufacture of camshafts is the supply of goods.
The Bench observed that “the impugned transaction is composite supply where the principal supply is the supply of services is not valid. In view of the above discussion, we hold that the impugned transaction is the supply of goods i.e. pattern/tool of specified specifications.”
According to a decision made by the bench of Dr. D. K. Srinivas (Central Tax) and Rajeev Kumar Mital (State Tax) Maharashtra Appellate Authority for Advance Ruling (MAAAR), the delivery made in accordance with the contract from 1.4.2019 to 12.2021 is considered to fall under entry at serial number 3(vi)(a) of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and is subsequently taxed at 6% under CGST, 6% under SGST, or 12% under the IGST Act.
The bench further observed that the ruling of 18% GST rate is binding till 1st March 2019. However as per the notification, supply under the contracts from 1.4.2019 to12.2021 is 12%.
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