This weekend summary provides an analytical synopsis of the 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 two weeks from April 16 to April 29, 2023
The Authority for Advance Ruling (AAR) bench of Dr M. P. Ravi Prasad and Kiran Reddy T Karnataka ruled that a 5% Goods and Services Tax (GST) is applicable to Bio-Phosphate.
The bench observed that the impugned product is said to have been manufactured/prepared by blending the carrier material Rock Phosphate with Phosphate Solubilizing Fungal and Bacterial cultures supplemented with essential mineral nutrients, which are crop nutrients and fertilizers.
It was observed by the members that heading 3103 covers Minerals or chemical fertilisers of phosphatic in nature. Further heading 3103 10 00 covers superphosphates and heading 3103 90 00 covers other phosphatic fertilisers
The Karnataka bench of Dr M.P Ravi Prasad (Member) and Kiran Reddy T (Member), Authority for Advance Ruling (AAR), has recently, in an application filed before it, held that renting of commercial buildings is taxable under GST.
The bench determined that “The GPA is the supplier of service and is liable to be registered in Karnataka under KGST/CGST Act, 2017. The GPA holder is required to pay tax on the supply of renting of immovable property service of commercial building”
The Rajasthan bench of Umesh Kumar Garg and Mahesh Kumar Gowla Authority for Advance Ruling (AAR) ruled that the supply of precast manholes using the steel and cement within the scope of the recipient is a supply of goods and 18% Goods and Services Tax (GST) is applicable.
The bench observed that it is imperative or any act to be of service should not be goods. It would be worthwhile to mention that the applicant himself stated that he has intention to manufacture and supply recast Manholes and Rises. Further, from the definition of supply, services, the applicant is to manufacture and supply Precast Manholes and Rises as per specific order from recipient but cement and iron is to be supplied by recipient on free of cost whereas if the recipient will not supply these main ingredients then it will be borne by the applicant itself.
The Karnataka bench of Dr M P Ravi Prasad and Kiran Reddy T Authority for Advance Ruling (AAR) ruled that the products are wooden ice cream sticks and wooden ice cream attracts 12% Goods and Services Tax (GST).
The bench observed that the contested objects, namely wooden sticks and wooden spoons, are made of a specific wood European White Birch (Betula Pendula) sourced from a Siberian forest and hence qualify as articles of wood. The bench then looked into a potential alternative classification for the contested products. We discovered that heading 4419 covers wood tableware and kitchenware and in particular 4419 90 covers wood tableware and kitchenware other than bamboo wood.
The Rajasthan bench of Umesh Kumar Garg and Mahesh Kumar Gowla Authority for Advance Ruling (AAR), after examination of all conditions and considering the nature of supply, ruled that the invoice raised by the Applicant for reimbursement of the salary/ staff cost on M/s. Adani Jaipur International Airport Limited is a consideration for supply which falls under the ambit of manpower service and hence taxable at the rate of 18% Goods and Services Tax (GST)
The authority observed that the emoluments received by the AAI form a part of services by transfer of outgoing concern. It seems the supply of manpower services by AAI to the M/s. Adani Jaipur International Airport Limited (SPV). The bench stated that there is no case for exemption on the reimbursement of emolument of employees to the AAI as services of manpower supply is provided by one distinct entity to another distinct entity where transfer of business as a going concern is not a precondition nor this supply of manpower services is a corollary to the agreement for transfer by outgoing concern for the operations management and development of the airport.
The Tamil Nadu bench of N. Usha and R. Gopalasamy , Authority for Advance Ruling (TN AAR) ruled that the services provided by the United Planters Association of Southern India (UPASI), a non- profit organisation to its registered members on the payment of amount towards subscription above ₹1000 is taxable.
The panel ruled that the applicant is eligible to claim exemption vide serial number 77A of Notification No. 12/2017 Central Tax (Rate) as amended by Notification No. 14/2017 Central Tax (Rate) in respect of subscription received from natural persons who are farmers simpliciter and the annual aggregate subscription amount for all membership, under various nomenclature, up to Rs.1000.
Although the oil is marketed as lamp oil, the Tamil Nadu bench of N. Usha and R. Gopalasamy Authority for Advance Ruling (AAR) declared that the classification may only be done based on the components of the item and not the end use of the oil.
The bench observed that the RBD Palmolein Oil is a fraction of Palm Oil obtained by a process called fractionation. Furthermore, it was noted that the production procedure for their “Roobini”-branded edible RBD palmolein is the same as the production process for Mahara Jyothi. Mahara Jyothi has no additives added, and its packaging bears the same FSSAI licence number as that for Roobini Refined Palmolein because both products go through the same manufacturing procedure.
The authority ruled that the Mahara Jyothi oil, which is an edible RBD Palmole in without any additives or mixture of other oils, is classifiable under the Tariff Head 1511 90 20
The Tamil Nadu bench of N. Usha and R. Gopalasamy Authority for Advance Ruling (TN AAR) ruled that 18% Integrated Goods and Services Tax (IGST) is applicable on the mattresses supplied to the educational institutions of both Karnataka State and other states.
The panel observed that the mattresses, classified by the applicant under HSN 940429, supplied by the applicant in the State of Tamil Nadu to hostel students of Government Schools, educational institutions of Government of Karnataka under Department of Social Welfare, through M/ s Coir Industrial Co-operative Society Limited is liable to 18% IGST. Additionally it was stated that the same 18% IGST rate will be applicable to other states also.
The Tamil Nadu bench of N. Usha and R. Gopalasamy Authority for Advance Ruling (TNAAR) determined that services, including services of common employees provided by a branch office to the head office and vice versa shall be subject to GST obligation under the relevant acts.
The panel stated that the statutory provisions of the Central Goods and Services Act (CGST Act), 2017, any supply of service between two registrations of the same person in the same State or in different States attract the provisions of Section 25 (4) and Section 7 read with Schedule I (2) and Section 15.
Section 25(4) of CGST Act, states that ‘a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.
The Tamil Nadu bench of N. Usha and R. Gopalasamy, Authority for Advance Ruling (AAR) ruled that the civil contracts provided by the applicant to the Indian Institute of Technology, Madras attract 18% Goods and Services Tax (GST).
The bench observed that Section 3 (j) (iii) of The Institutes of Technology Act, 1961 that IIT, Madras is a ‘Society’ registered under the Societies Registration Act, 1860, conferred with the status of ‘body corporate’ by Section 4 (1) of the said Act for the promotion of science, education, diffusion of useful knowledge, etc. under the control of Central Government. However, after omission of ‘Government Entity’ from the description of service under the vide Notification No.15/2021 C.T (Rate) dated 18.11.2021 read with Notification No.22/2021 c.T (Rate) dated 31.12.2021 with effect from 01.01.2022, the services of the applicant is covered under serial number 3 (xii) of Notification No. 11/2017 C.T (Rate) dated 28.06.2017 and attract CGST of 9%.
The Tamil Nadu Authority for Advance Ruling (TN AAR) bench consisting N. Usha (SGST member) and R. Gopalasamy (CGST member) allowed the application to withdraw the advance ruling application without going more into the detailed facts of the case.
The authority noted that there was no need to make a decision in advance because the central government had revoked the notification on which the applicant wanted clarification by issuing a new notification.
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