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 March 4 to March 11, 2023
Classification of Goods shall not alter on account of supply to Railways: AAAR confirms Roof Mounted Air-Conditioning unit classified under HSN Heading 8415 -2023 TAXSCAN (AAAR) 113 M/s. ESS ESS KAY ENGINEERING COMPANY PVT LTD
The Punjab Appellate Authority for Advance Ruling (AAAR) bench of Rajesh Puri, Chief Commissioner and Kamal Kishor Yadav, Commissioner of State Tax while confirming the roof mounted air-conditioning unit classified under HSN Heading 8415 ruled that classification of goods should not alter on account of supply to railways.
The bench Upheld the decision of the AAR Observed that Goods that is Roof Mounted Air-Conditioning unit manufactured by the appellant are classifiable under HSN Heading 8415
18% GST payable on Tipper body building & mounting if chassis owned and supplied by customer: AAR M/s. Raj Agro Aids 2023 TAXSCAN (AAR) 180
The Punjab bench of Viraj Shyamkarn Tidke and Vrinder Kaur Authority for Advance Ruling (AAR) has held that 18% Goods and Service Tax (GST) shall be payable on tipper body building and mounting if the chassis was owned and supplied by the customer.
The Authority determinmed hat The activity of building and fabricating of Tipper Body and mounting the same by the applicant and collecting fabrication charges including inputs required for such fabrication work, if the chassis was owned and supplied by the customer, would result in supply of services under SAC 9988 and would be attracting a GST @18%. The Authority further held that, the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned by the applicant and using its own inputs & capital goods would amount to supply of goods and would be classified under HSN 8707, attracting GST @28%.
GST applicable on supply of Aluminium Foil Type Winding Inverter Duty Transformer and their part: AAAR Shilchar Techonologies Limited 2023 TAXSCAN (AAAR) 114
The Gujarat bench of Milind Torawane (SGST) and Vivek (CGST) of Appellate Authority for Advance Ruling (AAAR) has held that Goods and Service (GST) would be applicable on supply of aluminium foil type winding inverter duty transformer and their part.
The authorityobserved that, the appellant was liable for payment of GST on the total value of both the purchase order i’e’ supply of goods and supply of services in terms of Explanation Entry inserted vide Notification No’234 to Notification No. 0l/2017- central Tax (Rate) dated 2g.06.2017 vide No’ 24/2018-central Tax (Rate) dated 31.12.2018 and liable to be taxed, up to 30.09.2021 as 3.5 % GST on goods and 5.4% upon services.
Institutions set up to carry out functions entrusted by Municipality are Governmental Authority, attracts GST @18%: AAAR Indian Hume Pipe Company Ltd- 2023 TAXSCAN (AAAR) 115
The Karnataka bench of Ranjana Jha and Shikha C ,Appellate Authority for Advance Rulings (AAAR) has upheld that the institutions set up to carry out functions entrusted by municipalities are governmental authority and attract a GST of @18%
The bench upheld the decision of Karnataka Authority for Advance Ruling (AAR) and held that, “In so examining, we find that BWSSB does not qualify as a ‘local authority’ as defined in Section 2(69) of the CGST Act. Accordingly, we hold that with effect from 1″ January 2022, the Appellant is not eligible for concessional rate of tax of 12% in terms of entry Sl.No 3(iii) of Notification No 11/2017 CT (Rate) dated 28-06-2017 as amended by Notification No 15/2021 CT (Rate) dated 18-11-2021 on the supplies made to BWSSB. We uphold the order passed by the lower Authority with regard to the rate of applicable tax on the supplies of works contract service made by the Appellant to BWSSB with effect from 1″ January 2022.
No ITC When Purchases from Seller discharged Tax Liability but Preceding Seller does not: AAR- 2023 TAXSCAN (AAR) 178- VIMAL ALLOYS PVT LTD.
The Punjab bench of Authority for Advance Ruling Viraj ShyamKarnTidke (CGST Member) and Varinder Kaur has held that the purchaser could not avail Input Tax Credit ( ITC ) when purchased from seller who discharged tax liability but preceding seller has not discharged tax liability
The Authority observed that the applicant could not avail Input Tax Credit (ITC) observing that, “section 16(2)(c) CGST Act and PGST Act, it is very much clear that no registered person shall be entitled to take the credit of any input tax in respect of any supply of goods or services or both unless the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply. If the seller or preceding sellers have not deposited the tax either in cash or through utilization of input tax credit admissible in respect of the said supply, the purchaser is not eligible to claim ITC on such supply.”
Rooftop Unit or Installation Kit sold individually or in Combination, attracts 10% GST: AAR EBERSPAECHER SUETRAK CITATION: 2022 TAXSCAN (AAR) 256
The Karnataka bench Dr. M.P. Ravi Prasad and T. Kiran Reddy of Authority for Advance Ruling (AAR), has held that Rooftop unit or installation kit sold individually or in combination merits classification under heading 8415 90 00 of Customs Tariff Act and hence it attracts 10% GST.
The Authority observed that “In this regard we observed that Rooftop unit and Installation kits are not classified individually under the Customs Tariff Act 1985, but are identified/recognised as parts of the composite machine i.e. “air condition system for a bus” itself. Thus the above items either individually or in combinations, are to be classified as parts of said composite machine, as they are suitable for solely or principally with a particular composite machine i.e. air conditioning system for bus. Thus they merit classification under heading 8415.90.00 i.e., parts of air conditioning machines and attracts GST accordingly.”
Works Contract Services Provided for Indian Railway either as Main Contractor or Sub-Contractor attracts 18% GST: AAR- S k Swamy and Company – 2023 TAXSCAN (AAR) 177
The Karnataka Authority for Advance Ruling ( AAR ) has recently ruled that the works contract services provided for the Indian Railway attract Goods and Services Tax ( GST ) at 18%, regardless of the nature of contract as subcontractor or as main contractor.
the bench observed that they are engaged in supply of works contract services to Indian Railways such as construction of Rail under bridge, construction of tunnels, execution of Earth Works Contract, supply and stacking of ballast and sub-contract of the above-mentioned contract works and wants to know the rate of GST on the same. In this regard, the ruling authority perused the entry No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, which was amended vide Notification No. 3/2022-Central Tax (Rate) dated 13.07.2022.
5% GST Applicable to Supply of Ballast to Railways: AAR- S k Swamy and Company CITATION: 2023 TAXSCAN (AAR) 177
The Karnataka bench of Members Dr M P Ravi Prasad and Kiran T Reddy of Authority for Advance Ruling ( AAR ) has ruled that the supply of Ballast to Railways attract Goods and Services Tax ( GST ) at 5% (CGST 2.5% and SGST 2.5%).
It was submitted that, “The Applicant has entered into a contract with Konkan Railway Corporation Limited for supplying and stacking ballast at Thokur ballast depot, loading into KRCL hoppers for CTR (P) works under AEN / Udupi. That is the applicant is supplying ballast to the Konkan Railway Corporation Limited and the supply of ballast to railways is exigible to GST at 5% (CGST @ 2.5% and SGST (HSN 2517) as per entry No. 126 of Schedule 1 of Notification No. 1/2017-Centra1 Tax (Rate), dated: 28.06.2017.”
Authority that determined that, “Supply of ballast to railways is exigible to GST at 5%(CGST @2.5% and SGST (@2.5%) (HSN 2517) as per entry No. 126 of Schedule I of Notification No. 1/201 central Tax (Rate), dated: 28.06.2017.
Supply of Ice Cream from Outlets Not “Restaurant Services”: AAR- HRPL Restaurants P Ltd. CITATION: 2023 TAXSCAN (AAR) 176
The Gujarat bench of Milind Kavatkar (Member State) and Amit Kumar Mishra (Member Centre) Authority for Advance Ruling ( AAR ) has held that the supply of ice cream from outlets could not be treated as restaurant services.
The Authority observed that the supply of ice cream from the outlets of the applicant could not be considered as supply of restaurant services. The readily available ice creams not prepared in their outlets sold over the counter were supply of goods. It was also held that an ice cream when ordered and supplied along with cooked or prepared food. through their outlets would assume the character of composite supply, wherein the prepared food being the principal supply and hence qualifies as restaurant services’.
Myntra is not Eligible for ITC on Vouchers which are Neither “Goods” nor “Services”: AAAR Myntra Designs Pvt Ltd CITATION: 2023 TAXSCAN (AAAR) 111
The Karnataka Appellate bench of Ranjana Jha and Shikha C, of Authority for Advance Ruling ( AAAR ) has held that Myntra design Pvt Ltd which is an Indian fashion e-commerce company would not be eligible for Income Tax Credit ( ITC ) on vouchers as it was neither good nor service
The bench of observed that the vouchers intended to be procured by the appellant were neither good nor service and could not be taxed referring to the honourable Karnataka High Court decision in “Premier sales promotion Pvt Ltd case”. The Authority upheld the ruling of lower authority observing that, “The Appellant has also made detailed submissions on why the vouchers cannot be termed as ‘gifts’ given to the customers. Again, we find that examining this aspect is of no relevance since we have already held that input tax credit is not eligible for an inward supply which is held by the High Court as being neither a supply of goods nor service. Therefore, while we agree with the ultimate ruling given by the lower Authority that input tax credit is not available on the vouchers received by the Appellant.
The Karnataka bench of M.P. Ravi Prasad (Member State) and Kiran Reddy (Member Central) Authority for Advance Ruling (AAR) has held that the supply of coir pith compost above 50kg bags are exempted from Goods and Service Tax (GST)
The Authority determined that the supply of Coir pith compost above 50kg Bags would be exempted from GST. it was further observed that, “Rule 3(b) of Legal Metrology (Packaged commodities) Rules, 2011 says that these rules are not applicable to packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilisers sold in bags up to 50 kg Le Chapter II of that Rules shall not apply to fertilisers sold in above 50 kg bags and hence they are not exigible to GST if sold in above 50 kg bags.”
Supply of Work Contract Service Attract 18% GST: AAR- M/s. Suez India Private Limited 2023 TAXSCAN (AAR) 175
The Bengaluru bench of Kiran Reddy T and M P Raviprasad Authority for Advance Ruling (AAR) has recently held that supply of frozen foods should attracts 18 percent Goods and Service Tax.
the authority While in discussion observed that” as per the notification N0.11/2017 Central Tax (Rate)as amended Notification No.30/2017,Defined Governmental Authority, so applicant is a government authority as per the above notification
The bench determined that work contract service supplied by the applicant in relation to sewage treatment to Bengaluru Water Supply and Sewerage Board on or after 1 January 2022 is exigible to GST at 18%
Applicant cannot seek Advance Ruling on Supply where he is Recipient of Services: AAR Anmol Industries Limited 2023 TAXSCAN (AAR) 171
The West Bengal bench of Brajesh Kumar Singh (CGST Member) and Joyjit Banik (SGST Member) Authority for Advance Ruling ( AAR ) has rejected the application for advance ruling holding that the applicant could not seek an advance ruling on supply where the applicant himself was the recipient of services.
The Authority rejected the application holding that to bear the incidence of tax as a recipient of supply could not be construed as payment of tax under the GST Act, as contended by the applicant. It was further observed that “In the subject application, the applicant cannot seek an advance ruling in relation to the supply where he is a recipient of services.”
Milling of Wheat into Flour to Govt of West Bengal Public Distribution System Eligible for GST Exemption: AAR JAI LOKENATH FLOUR MILLS PRIVATE LIMITED- 2023 TAXSCAN (AAR) 173
The West Bengal bench of Brajesh Kumar Singh, (CGST Member) and Joyjit Banik, (SGST Member) 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 held 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
GST Applicable on Desilting of Foreshore of Prakasam Barrage to Water Resource Department Andhra Pradesh Government: AAR Reach Dredging Limited- 2023 TAXSCAN (AAR) 172
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 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.
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