AAR WEEKLY ROUND-UP

This weekly round- up analytically summarizes the key stories related to the GST Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR), reported at Taxscan.in during the previous week from October 24^th to 30^th, 2022.

Re: M/s. GEORGE MAIJO INDUSTRIES PRIVATE LIMITED CITATION:   2022 TAXSCAN (AAR) 271

The Kerala Authority for Advance Ruling (AAR), has recently clarified that the sale of Yamaha Out Board Motors (OBMs) for use in fishing vessels attract 5% concessional Goods and Services Tax (GST) instead of 28% normal GST. The aforesaid observation was made by the authority when the applicant, M/s George Maijo Industries Private Limited, which imports and supplies Yamaha Out Board Motors and related parts to their various customers in India, requested an advance ruling regarding the classification and the rate applicable for sales of OBMs to fishermen and other Government agencies. With the applicant submitting that Yamaha Out Board Motors and their accessories being sold mainly to Fishermen, Boat Builders, Defence Department and other agencies, the OBMs procured by the applicant falls under the Harmonized System of Nomenclature (HSN) Code 8407 21 00, it was observed by the Authority that parts of goods of headings 8901,8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts, the same would attract GST at the rate of 5%.

Re: M/s URALUNGAL LABOUR CONTRACT CO-OP SOCIETY LTD CITATION: 2022 TAXSCAN (AAR) 269

The Kerala Authority for Advance Ruling (AAR), has recently ruled that Works Contract Services for construction provided to Malabar Cancer Centre attracts 18% GST.The aforesaid observation was made by the authority when an application was filed before it by the applicant,M/s. Uralungal Labour Contract Co-operative Society Ltd (ULCCS), an entity registered under the Kerala Co-operative Societies Act, 1969, primarily engaged in the construction of roads, bridges and other public infrastructure for the Government and other institutions, which isalso an accredited agency for the Government of Kerala. With the ssesseesubmitting that they have entered into an agreement with the Director of Malabar Cancer Centre (MCC), Kannur, which is established as a charitable society registered under the Societies Registration Act for the construction and extension of site and building, it was held by the Authority that the services rendered by the applicant to Malabar Cancer Centre as detailed in the application are eligible for the concessional rate of tax of 12% prescribed in the entry at SI No. 3(vi) of Notification No. 11/2017 Central Tax (Rate), as Malabar Cancer Centre is a governmental authority as per definition of governmental authority.

Re: M/s Oyester Auto Body CITATION: 2022 TAXSCAN (AAR) 270

The Kerala Authority for Advance Ruling (AAR), has recently ruled that activity of Commercial Vehicle Body Building on chasis supplied by customer attracts 18% GST
The aforesaid ruling made made by Authority when the applicant, M/s. Oyester Auto Body which is engaged in the business of body building of commercial vehicles used for carrying goods, sought an advance ruling on whether the activity of commercial vehicles bodybuilding on a job-work basis, on the chassis supplied by the customer, is a supply of goods or a supply of services ,as well as to the rate of GST applicable for the same.

Re: M/s. Zydus Lifesciences Ltd. CITATION: 2022 TAXSCAN (AAR) 253

The Gujarat Authority for Advance Ruling (AAR), has recently in an application filed before it held that, subsidized deduction made by the Applicant from the employees who are availing food in the factory/corporate office, would not be considered a supply under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Gujarat Goods and Service Tax Act. 2017. The aforesaid observation was made by the Tribunal when the applicant M/s. Zydus Lifesciences Ltd, engaged in the manufacture, supply and distribution of various pharmaceutical products, having 1200 (approx.) employees in their factory and registered under the provisions of the Factories Act, 1948, filed an application before the Authority contenting that the amount deducted from the salary of the employees for providing subsidized canteen facilitycannot be considered as supply under Section 7 of CGST Act.

Re: M/s GALAXYHOMES PRIVATE LIMITED CITATION: 2022 TAXSCAN (AAR) 267

The Kerala Authority for Advance Ruling (AAR) has recently ruled that one-third the amount charged for supply of residential apartments after construction, is taxable at 18% Goods and Services Tax (GST), 9% Central Goods and Services Tax (CGST) and 9% State Goods and Services Tax (SGST).The aforesaid observation was made by the Authority when the applicant, M/s Galaxy Homes Private Limited, seeked a ruling with regard to the taxability of residential apartments constructed on building permits, obtained in their own name and supplied after being constructed. With the applicant seeking as to whether the concessional rate of GST at 12% is applicable in the case of residential apartments constructed in this manner, it was ruled by the Authority ruled that the applicant is liable to pay GST at the rate of 18% [9% – CGST + 9% – SGST], in respect of the services of construction of residential apartments supplied by them.

Re: M/s GALAXYHOMES PRIVATE LIMITED CITATION: 2022 TAXSCAN (AAR) 267

The Kerala Authority for Advance Ruling has recently, in an application filed by Galaxy Homes Private Limited, ruled that developers can deduct one-third of the total amount received for supply of constructed residential apartments after construction from the taxable amount, as the deemed value of the land or undivided share of land involved in the supply. While considering the aforesaid application, it was observed by the Authority that the provisions of Section 15 of the Central Goods and Services Tax (CGST) Act, 2017 read with Para 2 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, will apply, for determining the taxable value of the services supplied for the period from 01.07.2017 onwards, resulting in its ruling that the value of land or undivided share of land being deemed to be one-third of the total amount charged for the supply, irrespective of the actual value of land , the applicant thus, is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply.

Re: M/s. Simoco Telecommunications(South Asia) Limited CITATION: 2022 TAXSCAN (AAR) 264

The West Bengal Authority for Advance Rulings (AAR) has recently held that 18% GST is applicable for the supply to be provided to State Urban Development Agency for Municipal Wet Waste processing facility along with operation & maintenance under Swachh Bharat Mission/Mission Nirmal Bangla. The aforesaid ruling was made by the Authority when the appellant, Simoco Telecommunications (South Asia) Limited, approached the Authority stating that the State Urban Development Authority had accepted their offer for design, build, finance, operate and transfer of Municipal Wet Waste processing facility based on Composting and/or Bio-methanation Technology, setting up Semi-Automatic Material Recovery Facility for Dry Waste and construction of Sanitary Land fill along with operation & maintenance for 10 years (Renewable) under Swachh Bharat Mission/Mission Nirmal Bangla and further that a “Letter of Acceptance cum Work Order” was also issued to him to carry out the said activities in respect of a number of municipalities in West Bengal.

Re: M/s. Mz s. Zigma Global Environ Solutions Private Ltd CITATION: 2022 TAXSCAN (AAR) 266

The Kerala Authority for Advance Ruling (AAR), has recently, in an application filed before it, held that bio –mining and scientific closure of legacy wastes, are exempted from GST. The aforesaid observation was made by the Authority when the applicant M/s. Zigma Global Environ Solutions Private Limited, a service provider of Municipal Solid Waste (MSW)management solutions, filed an application before it with regard to the Classification of the services viz Bio- Mining and Scientific Closure of Legacy wastes at the dump site in Kureepuzha, Kellam, to be provided by the Applicant to the Superintending Engineer, Kollam Municipal Corporation.

Re: M/s. Crescent Builders CITATION: 2022 TAXSCAN (AAR) 265

The Kerala Authority for Advance Ruling (AAR) has recently held that the residential apartments under the category “affordable residential apartments”, having carpet area not exceeding 60 square metre in metropolitan cities or 90 square metre in cities, are taxable at 1.5% Goods and Services Tax (GST) as 0.75% Central Goods and Services Tax (CGST) alongwith 0.75% State Goods and Services Tax (SGST). The aforesaid ruling was made by the Authority when the Applicant, Crescent Builders approached the authority to clarify whether affordable residential apartment in a residential real estate project, when the project consists of both “Affordable Residential Apartments” as well as apartments other than Affordable Residential Apartments, are taxable at 0.75% State and 0.75% Central GST, wherein it was ruled by the Authority that the applicant is liable to pay GST at the rate of 1.5% GST and 7.5% GST for affordable residential apartments and for apartments other than affordable residential apartments in the same project respectively.

Re: M/s. Panjab State Power Corporation Limited CITATION: 2022 TAXSCAN (AAR)

The Punjab Authority for Advance Ruling (AAR), has while considering an application filed before it, held that 5% GST is applicable to coal rejects. The aforesaid observation was made by the Authority when M/S Punjab State Power Corporation Ltd., a Punjab Govt. undertaking engaged in the generation, transmission and distribution of electricity, with GST registration no 03AAFCP5120Q1ZC, which is exempt from the GST Act, vide notification number 12/2017(Central Tax Rate), dated 28th June,2017(Tariff Heading 9969), filed an application before it, with regard to the taxability of coal rejects, wherein it was ruled by the Authority that Coal rejects are to be classified under HSB 2701 and hence that the same are taxable at 5% GST rate.

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